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Some buyers have been rising more and more nervous concerning the inventory market. It could be straightforward to level to that on account of the efficiency of a handful of tech shares within the US market. However whereas the London market is on a much less stretching valuation, that doesn’t imply it’s essentially low cost.
The FTSE 100 index of main UK blue-chip shares has repeatedly hit new highs up to now in 2025, in any case — together with this week. So in opposition to that backdrop, may the FTSE 100 nonetheless doubtlessly current an investor with alternatives?
Taking a long-term method
I feel the reply is sure. Simply because a market hits a file excessive doesn’t essentially imply that it’s overvalued (or undervalued). Not solely that, however the present worth is only a snapshot. It may be straightforward to pay an excessive amount of consideration to it, relatively than asking what I feel is a extra helpful query.
That query is, as an investor, am I in a position to purchase a stake in an excellent enterprise (or companies) in the present day for markedly lower than I feel they are going to be value over the long run?
Taking that method, even when I purchased a share now and its worth then went down, it might not essentially trouble me. As an alternative, I might concentrate on the truth that in the long run its worth (in my view) must be greater than it’s.
Persistence is useful in that situation, in fact. If it was a dividend share, I’ll even be paid to attend!
Looking for bargains in the present day
So are there any FTSE 100 shares that may nonetheless be the kind of share I describe above? I feel so. In spite of everything, the index incorporates 100 totally different shares. Whether or not it’s driving excessive like now, or not, a few of these particular person shares may doubtless be bargains – and others could not.
One FTSE 100 share I feel buyers ought to take into account in the mean time is brewer and distiller Diageo (LSE: DGE). The index’s sturdy efficiency this yr (up 15%) is not any due to Diageo, a share that has fallen 29% up to now in 2025.
There may very well be good causes for that. Diageo has been battling short-term challenges when it comes to weak demand in Latin America and elsewhere. It’s preventing a medium-term problem, of a sluggish financial system hurting tipplers’ enthusiasm for premium-priced spirits. Additionally it is grappling with the long-term development of fewer youthful customers consuming alcohol.
Given all that, it’s straightforward to see why some buyers have cooled on Diageo, regardless of its huge earnings and decades-long streak of annual will increase in its dividend per share.
I feel the inventory market response could have been overdone although. Diageo has expanded into non-alcoholic drinks. That defensive transfer solely excites me marginally as an investor. What I feel stays the large alternative is booze.
The FTSE 100 firm is aware of the right way to make it and promote it. Its portfolio of premium manufacturers and distinctive manufacturing amenities corresponding to storied distilleries offers it pricing energy.
