From Yahoo Finance: 2024-06-26 13:18:00

The FTSE 100 index hit a new all-time high last month, but has since fallen by around 3%. This drop may seem small, but considering the index’s 11% growth over the past five years, it is significant. Investors are wondering about the cause and how to adjust their portfolios in response.

Stock market activity typically slows in the spring and summer months, known as the “sell in May and go away” adage. Full-year results often drive share prices up in spring, leading to a slowdown as summer approaches.

Rather than trying to time the market, investors can focus on individual shares. While the FTSE 100 may be cooling off, some shares like Rolls-Royce have tripled in value while Burberry has seen a significant decline.

Burberry, with a dividend yield of 6.3%, recently released poor full-year results. Despite a 4% revenue decline, the company’s operating profit dropped by 36% and attributable profit fell by 45%. Free cash flow also experienced a significant decline.

Investors are divided on Burberry’s potential as a bargain. The company’s strong brand and high yield are attractive, but weakening demand in the luxury sector poses risks. For now, investors are exploring other potential opportunities within the FTSE 100.



Read more at Yahoo Finance: After its new high last month, is the FTSE 100 losing momentum?