Is the FTSE 100 in a stock market bubble? Image source: Getty Images.
In a stock market bubble, prices are inflated, fragile, and liable to burst. Investors act irrationally, perhaps manically, and herd together to chase stock prices higher and higher. This is not to say investors buying into a bubble are unintelligent; Sir Issac Newton lost a fortune pilling into the South Sea Bubble in 1720, just before it popped. People seem to get swept up in a mass fear of missing out on the hottest prospect on everyone’s lips.
The early 2000s were notable for the bursting of the dot-com bubble. Companies that added ‘.com’ to their names, and some that did not, were trading at extraordinary prices. This, despite having little revenue and zero earnings. Of course, some companies did go on to eventually deliver much of what was expected in the dot-com boom. However, caught up in the mania, investors associated the Internet with success, with little regard given to the
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I will continue to invest regularly in dividend stocks inside a Stocks and Shares ISA in 2021
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The core of my Stocks and Shares ISA is made up of dividend hero stocks. I drip money into the core of my portfolio each month. Let me explain why regular investing in dividend-paying stocks inside a tax-free wrapper (provided by a Stocks and Shares ISA) is a cornerstone of my investment plan.
Regular investing
2020 was a challenging year for investors. Stock markets around the world crashed in March. The
FTSE 100 fell around 30% in little under a month to a low of 5,191. Then it rallied into June and drifted downwards into November. From December 2020 into 2021, the FTSE 100 has been moving higher but in a volatile fashion. Down at the level of individual stocks, there was much more variability in returns.
Should I buy Rolls-Royce shares?
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At first glance,
Rolls-Royce(LSE: RR) shares look cheap from a price perspective. The stock is currently changing hands at 98p, significantly below its five-year high of 378p.
As a value investor, this has attracted my attention. I like to buy shares in companies when they’re trading at low prices and, right now, it looks to me as if shares in the aerospace group are in that territory.
US$12.3 TRILLION out of thin air…
And if you click here we’ll show you something that could be key to unlocking 5G’s full potential.
The prospect of a 7% dividend yield makes me keen on this company’s shares
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City analysts expect industrial services provider
Hargreaves Services(LSE: HSP) to pay dividends yielding in excess of 7%. The projection covers payments for the current trading year to May 2021 and the year following.
They also expect generous double-digit percentage increases in earnings for those two periods. Meanwhile, in today’s half-year results report, the company revealed the disposal of its remaining coal assets for £24m. The post-period-end deal allowed the company to
“
eliminate bank borrowing”.
US$12.3 TRILLION out of thin air…
And if you click here we’ll show you something that could be key to unlocking 5G’s full potential.