FTSE 100 shares gained 11% in November. That would be a cracking result for a year, never mind a month. But by any measure, it’s been the weirdest stock market year in the memories of most of us. The top index is still 15% down year-to-date, and people will surely be talking of the crash of 2020 for years. But my one big take is: what a great year it’s been for buying shares. Well, at least from March onwards.
The mini recovery in November will have gladdened the hearts of many investors, but I’m hoping it will slow down a bit. Why? Because, over the next six to twelve months, I’m planning to put as much cash as I can into buying cheap shares. I’m looking at FTSE 100 shares, and FTSE 250 candidates too. Shares from any index, in fact.
Which FTSE 100 shares to buy?
What will I go for? I’m not going to buy into companies whose businesses have genuinely been damaged by the Covid-19 pandemic. So no Rolls-Royce for me, for example. Rolls has been a great company for many decades. But the problem is I don’t yet understand what it will look like, financially, when and if we ever get back to normal.
I do, however, have BAE Systems on my list of possibilities. BAE shares are down 9% year-to-date, but I don’t see the business as having been fundamentally altered. It’s been among those FTSE 100 shares I’ve liked but never bought for years. And I reckon it’s selling at a bargain price now.
Many years ago I almost bought Halfords shares. I’ve always thought it a well-focused and well-managed company. With hindsight I’m glad I didn’t, as it subsequently went through a wobbly spell. But now? I recently offered my thoughts on Halfords. It’s on the list.
Financial sector comeback?
The banks have been perpetually undervalued, haven’t they? Well, I’ve placed them among the best value FTSE 100 shares for years. They’re the bedrock of the economy, and other businesses simply can’t operate without them. Speaking of banks, I checked my shareholdings the other day to see I was precisely 50.00% down on Lloyds. Compared to earlier in the year, that’s a win.
A Lloyds top-up is a possibility. But I also think Barclays has the potential to recover strongly in 2021. And I like the way HSBC is refocusing on its core markets and core strengths. I’ve always seen insurance stocks as good long-term investments too, though I do expect some cyclicality. I already own Aviva shares, but I also like the look of Legal & General.
These are all FTSE 100 shares, and all buy candidates for me.
Becoming more attractive
I went through a long spell of not liking Tesco. That started mainly after the firm’s decline, around the time Warren Buffett dumped them. And it continued through a few years of false starts for Tesco’s recovery. But the lockdowns have shown what a big advantage Tesco enjoys with its leading online delivery service. On the list it goes.
Thinking of more FTSE 100 shares I’ve changed my mind over, I’m tempted by dividend prospects from Vodafone now. I’m even considering the riskier Russian steelmaker Evraz for potentially big yields too.