Itâd take someone far more courageous than me to help Bitcoin recover after last yearâs catastrophic decline. The exercise of dip-buying has often been compared to trying to catch a falling knife, and itâs true. I’ve engaged in a few contrarian buys on the FTSE 100 while the rest of the global stock markets were selling off, and some of them sold off a little more since I piled in.
I remain confident, though, that these stocks will pay me back in spades in the years ahead. And at their price levels — many of them trading inside the considered value benchmark of 15 times or below — I considered them too cheap to miss.
Timing your trades is a true science that none of us get right all the time. That said, I think itâs obvious now is not a good time to do some bargain shopping with Bitcoin. Its 70% price decline over the past 12 months suggests the buzz around the virtual currency has been well and truly imploded. And there could be further pain in 2019 should measures to regulate the asset fall flat.
A better buy
If youâre looking to engage in a bit of dip-buying, then Footsie dividend stock St Jamesâs Place is a much better bet, in my opinion.
Its share value has fallen more than a quarter during the past year as fears over the health of the global economy have picked up. I would consider this to be one of the best buying opportunities on the blue-chip index right now. However, the companyâs now trading on a forward P/E ratio well under its historical average at 19.8 times.
Fortunately, fresh trading details released today underlined my bullishness. Despite what it described as âthe particularly difficult market conditions,â fourth quarter gross inflows still clocked in at respectable ÂŁ3.95bn. This was down from the corresponding October-December period a year ago, but in the context of that tough trading environment, as well as the record final quarter of 2017, the result was still impressive.
A 6%-yielding dividend star
For the whole year, St Jamesâs Place saw gross inflows rise 8% year-on-year to ÂŁ15.7bn, a result that pushed total assets under administration up 5% to ÂŁ95.6bn. And the business noted today: âWhile challenging market conditions⊠will slow the pace of fund inflows from time to time, the fundamentals of our clients’ financial planning requirements remain unchanged.â
And this more or less sums up why I like St Jamesâs Place so much. The increasing demand for financial services from ageing citizens leaves terrific sales opportunities for the business to exploit, a backdrop which itâs capitalising on by expanding its staff base (total headcount rose 8% to 3,954 advisers last year, for example).
The City expects the London business to grow profits by double-digit percentages in both 2019 and 2020 despite these challenging conditions. And this means that dividends are expected to keep rising too, meaning that St Jamesâs Place boasts gigantic yields of 5.3% and 6.2% for this year and next, respectively. Given its rosy long-term outlook and those huge yields, I would consider the FTSE 100 star to be a much more sensible buy than Bitcoin right now.