Up 15% this yr, the FTSE 100 simply hit a brand new all-time excessive! What comes subsequent?

It has been a banner yr for Britain’s index of main blue-chip corporations, the FTSE 100.

Throughout at this time’s (6 October) market session, the index hit a brand new all-time excessive. It has performed that repeatedly this yr. In reality, the generally staid-seeming FTSE 100 now stands 58% increased than 5 years in the past.

What would possibly occur from right here – and the way can I attempt to use it to my benefit as a small non-public investor?

Market predictions might be tempting – however harmful

In reality, no person is aware of what is going to occur from right here for certain. We will solely speculate at greatest.

An all-time excessive whereas the economic system appears to be like more and more fragile could seem incongruous. Taken along with wider geopolitical dangers and indicators of an AI bubble within the US inventory market, it has led some traders to worry the prospect of a inventory market crash.

Then again, whereas the US market has been racing forward, the London market appears to be like much less expensively priced.

The value-to-earnings ratio of the FTSE 100 is effectively under its US equal. Perhaps the upwards momentum can proceed!

Attempting to find long-term worth

So, quite than spending a lot of time attempting to time the market – one thing I see as in the end pointless – I’m as an alternative getting again to brass tacks.

My method to investing is looking for nice companies which have engaging share costs.

If I put money into a diversified mixture of such corporations, I hope that over time I can goal to construct wealth because of a mix of dividends and share value progress. That, at the least, is the aspiration!

In observe, dividends aren’t assured. Whereas the FTSE 100 has been on hearth recently, it’s all the time price remembering that share costs can fall in addition to rise.

That’s generally the case even when an organization is doing effectively. Its share value might be affected by wider adverse market sentiment, for instance, or it might be that an organization’s share was merely overpriced earlier than.

However taking a long-term method to investing helps, for my part. I imagine that, over the long term, nice companies should create substantial worth – and hopefully that shall be mirrored of their share value.

Overwhelmed down, however with promising indicators

For instance of such an method, for some time I owned FTSE 100 vogue home Burberry (LSE: BRBY). Final yr, its share value fell a great distance – and got here again a great distance too. This yr, it did the identical.

What has been happening?

With luxurious items markets wrestling with weak demand in lots of areas, Burberry’s economics started to look much less engaging. Weak gross sales efficiency didn’t reassure the Metropolis and the corporate’s administration modified final yr.

However over the long run, I see quite a bit to love. The corporate has a singular model that has confirmed its enchantment to many purchasers time and again. It has a confirmed enterprise mannequin and, whereas the high-end rag commerce might be cyclical, ultimately demand often bounces again as soon as the economic system does effectively sufficient.

Burberry shares – up 91% since April — soared after I purchased them. I made a decision to take that revenue off the desk and hunt for different FTSE 100 shares I assumed might be long-term bargains. If the Burberry share value falls down once more, although, it’s on my buying listing.