I’ve bought for the Snowball 9455 shares in Warehouse REIT for 8k, yielding 7.5% but trading at discount to NAV of 34%.

Cash for re-investment £494.00

I’ve sold the shares in the Snowball for a profit of £1,576.00, which when re-invested should return income of £126 pa. All baby steps.

KKR confirms making 4 takeover proposals for Assura; says Assura rejected all proposals.

£££££££££££

It looks as the bid at 48p will fail, although AGR ‘are now in play’.

FTSE shares: the perfect ‘get rich slow’ idea?

As a long-term investor, Christopher Ruane reckons the FTSE 100 could offer him the foundations to create stock market wealth. Here’s why.

Posted by

Christopher Ruane

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.Read More

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

The world is full of get-rich-quick schemes. Buying FTSE 100 shares is not one of them, as far as I am concerned. Still, it could be a path to riches albeit at a more leisurely speed.

The foundations of wealth creation

In theory at least, getting rich is not that complicated. Buying assets for less (ideally much less) now than they will be worth in future is one way to do it.

FTSE 100 shares are a form of asset. But the key point, as far as I am concerned, is that they represent a stake in a much bigger asset: a company like Shell or AstraZeneca.

So by putting money into such shares when they are attractively valued, piling up (or reinvesting) any gains along the way and holding for the long term, I think it is possible to create wealth.

That depends, of course, on adding some money in the first place. Owning the right shares can be one way to build wealth – but it takes at least some money to purchase them to start with.

Here’s what can set FTSE 100 shares apart

Shares in far smaller, less known and potentially flashier companies can often seem more interesting to at least some investors.

Many people dream of putting a few pounds in some unknown penny stock and striking it rich.

It is true that some small companies go on to make massive returns for early stage shareholders. But loads do not. They simply sell more and more shares to raise cash, burn that cash and go bankrupt.

A great business idea or product innovation is not necessarily the basis of a great investment for a small, private investor.

By contrast, FTSE 100 shares can seem boring and stodgy. Some are mature businesses in areas that seem to offer little or no future growth opportunities.

But they are big. In most (not all) cases, they have grown big by honing a successful business over decades. The market can lose sight of that and send a share crashing in price from time to time.

I think that offers an opportunity for an investor to build a diversified portfolio of great companies at attractive prices – and hopefully build wealth.

Want to know what I think a great company looks like?

As an example, JD Sports (LSE: JD) is worth considering.

See how much the price has moved around? Even over the past year alone, the cheapest price has been less than half the most expensive one.

Has the actual value of JD Sports’ business seesawed as much as that in just 12 months? I do not think so (though I could be wrong).

Rather, I think investors have struggled to value the business. Its stream of profit warnings suggests consumer demand may be weakening and JD’s store opening programme risks eating into profits.

Still, the retailer does expect full-year profit before tax and adjusting items of £915m–£935m. Against that, its market capitalisation of £4.5bn looks cheap to me given JD’s strong brand, proven business model, resilient profits and growing international footprint.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

C Ruane has positions in JD Sports Fashion. The Motley Fool UK has recommended AstraZeneca Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

3. Emotional decision-making due to lack of investing psychology

“I’m not emotional about investments. Investing is something where you have to be purely rational and not let emotion affect your decision making – just the facts” – Bill Ackman

Investing is far more about psychology than it is intelligence which is why another mistake investors often make is allowing emotions, such as fear or greed, to drive their investment decisions. Emotion-driven decisions can lead to reactionary buying or selling, which can harm investment returns. Instead, investors should develop a well-defined investment plan and adhere to it, focusing on long-term goals rather than short-term market fluctuations. Staying calm during short-term market fluctuations and not being impulsive should lead to being a long-term investor who has fully researched their chosen investment thus remaining invested and when successful, being rewarded over multiple years rather than months. The compounding impact of fewer trading costs and greater total returns can have a significant multiplier effect on an investor’s long-term portfolio performance.

In addition, we can often become emotionally entangled in our investment, and might not be willing to see the rational and logical challenges that need dealing with. Our brains can trick us into believing that something has more merit than it does. We have many unconscious biases, which act like shortcuts for our brains to help us make decisions, however, they can also prevent us from making the best decisions. There is one called the ‘affinity bias’ which means that we could make uneconomical investment decisions if we believe an investment aligns to our values. For example, if we invest in an ESG company because we believe in their vision and values, we may not pay adequate due diligence or be open to changes that need addressing if they are not performing well.

Here’s the most likely cause of a stock market crash in 2025

Stephen Wright thinks investors should keep a close eye on the inflationary effect of US tariffs as the biggest threat to the stock market in 2025.

Posted by

Stephen Wright

Published 16 February

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Theoretically, the stock market could crash for any number of reasons. A big political event, a pandemic, or a financial crisis could send share prices plunging without notice. 

In practical terms, however, there are some things that are easier to anticipate than others. And one thing in particular stands out to me as an obvious potential threat in 2025. 

Inflation

As I see it, the biggest risk with the stock market right now is the possibility of US inflation picking up. This is worth keeping a close eye on for investors on both sides of the Atlantic. 

The US is introducing 25% tariffs on imported steel and aluminium. And while that might benefit the likes of Alcoa and Steel Dynamics, it could be a problem for other businesses.

The obvious examples are international steel companies, which might see lower demand. But restricting imports could cause input costs to rise for manufacturers.

If businesses look to pass these on, the result will be higher prices for US consumers. In other words – tariffs could give rise to inflation.

Share prices

If this happens, investors are likely to look for better returns from their assets. In the case of the bond market, this means higher yields.

US inflation is currently 3%. But if it reaches 3.5% (where it was a year ago) investors buying bonds with a 4.5% yield (the current US 10-year level) don’t stand to make much in real terms.

Higher inflation is therefore likely to weigh on bond prices. And if this happens, bonds could start looking attractive compared to stocks – causing share prices to come down as well.

The US currently makes up more than half of the global stock market. So a stock market crash across the Atlantic could weigh on share prices everywhere else – including the UK. 

What should investors do?

Forecasting a stock market crash is nearly impossible. But one thing investors can do is look for shares that are already trading at prices that reflect some pessimistic assumptions.

Diageo (LSE:DGE) is an obvious example. The stock is currently at its lowest price-to-earnings (P/E) multiple in a decade, meaning it’s already cheap compared to where it usually trades.

There are reasons for this. A lot of the FTSE 100 firm’s products have to be produced in certain geographies, meaning there’s no way to make them in the US – and thus no way around tariffs.

This is a definite risk, but the scale of Diageo’s distribution network is an important asset. Over the long term, this should be a big advantage when it comes to competing for market share.

Eyes open

I think it’s important for investors to pay attention to what’s going on in the stock market. This can help make sense of why share prices are moving the way they are. 

Right now, the biggest risk I see is the threat of inflation picking up in the US. But this may or may not result in a stock market crash – and I don’t think betting on this is a good idea.

A better plan, in my view, is looking for opportunities where investors are already factoring this in. And I think Diageo is an example of a stock that’s worth considering at today’s prices.

Passive income gets a good press. Robert Kiyosaki, author of Rich Dad Poor Dad, once wrote: “The moment you make passive income and portfolio income a part of your life, your life will change. Those words will become flesh.”

And Warren Buffett’s a fan. The billionaire famously said: “If you don’t find a way to make money while you sleep, you will work until you die.”

A trust to consider for your portfolio, as it pays a dividend of 4% on the year end NAV.

If you wanted to maintain a blended yield of 7% it would have to be pair traded with a higher yielder.

Most probably dangerous to buy now as it’s been trending up for nearly 3 years.

The trend is your friend until the bend.

 JPMorgan Global Growth & Income PLC and Henderson International Income Trust PLC on Friday said they have agreed on a combination, creating an investor with GBP3.4 billion in net assets.

The proposed deal between the London-based investment trusts will see HINT’s assets rolled into JGGI, under a scheme of reconstruction.

There is no cash option proposed, due to the “strong rating and liquidity” of JGGI shares, as well as the similarity of both firms’ investment strategies.

“Investment trusts are in the spotlight at present, and there are growing calls from investors for consolidation, with the emphasis on the need for larger, more liquid vehicles that offer highly competitive cost structures,” said JGGI Chair James Macpherson.

HINT trading at around a 4% discount to NAV, so if you wanted to buy JGGI, it might be better to buy HINT and wait for the merger as you should get more shares for your hard earned.

A Trust I would consider for the Snowball when the market melts down.

Top 10 funds and trusts in ISAs

TrustNet

Company Name

Place change

1 Royal London Short Term Money Market

Up 2

2 Scottish Mortgage Ord SMT

Down 1

3 Greencoat UK Wind UKW

Up 1

4 L&G Global Technology Index I Acc

Down 2

5 Vanguard LifeStrategy 80% Equity Up 2

6 JPMorgan Global Growth & Income Ord JGGI
Up 2

7 Fidelity Index World P Acc

Unchanged

8 F&C Investment Trust Ord FCIT
New

9 Polar Capital Technology Ord PCT
Down 4

10 Alliance Witan Ord ALW
New

Cash was king last week, with Royal London Short Term Money Market rising two places to take the top spot.

The money market fund, which can be viewed as a cash proxy due to its investments in overnight deposits and ultra-short term bonds, yields around 4.8%.

However, given that UK interest rates have now fallen to 4.5%, the yield on this strategy will also fall over the coming months. The Y units automatically reinvest any income generated, rather than paying it out.

UK interest rates cut to 4.5%.

Tech funds lost popularity last week, even as the Nasdaq 100 index in GBP rose about 1.5%. Scottish Mortgage Ord
SMT fell one place to second, L&G Global Technology Index dropped to fourth place, and Polar Capital Technology Ord
PCT fell four places to ninth.

Tech shares have moved higher this year, with SMT up 13.7% and PCT up 4.6%. They continue a strong run since 2023, driven by developments in artificial intelligence (AI) technology and lower interest rates.

The other risers last week were Greencoat UK Wind
UKW , Vanguard LifeStrategy 80% Equity and JPMorgan Global Growth & Income Ord JGGI, Global multi-manager trusts Alliance Witan Ord
ALW and F&C Investment Trust Ord
FCIT were new entries, while Fidelity Index World held on to seventh position. HSBC FTSE All World and Vanguard US Equity Index dropped off the list.

The Results Round-Up: The week’s investment trust results

Diverse Income (DIVI) outperforms both the benchmark and peers; Henderson Opportunities (HOT) outperforms despite the distractions of a strategic review and the unwanted attention of a certain activist investor; Brunner’s (BUT) all-weather approach clocks up a double-digit NAV return; and Scottish American’s (SAIN) managers put their money where their mouths are after a tough year.

By Frank Buhagiar

Diverse Income Trust (DIVI) outperforms

DIVI beat all comers hands down over the latest half-year period. For all comers read the benchmark and the small-cap investor’s peer group: NAV total return came in at +4.9% compared to the Deutsche Numis All-Share Index’s +2.1% and the peer group’s +0.9% average return, while DIVI’s +5.3% share price total return topped the lot. Not bad going considering, as Chairman Andrew Bell points out, that “the share prices of smaller companies and AIM stocks remained under pressure.” Reasons cited include “persistent selling of UK equities by domestic investors, amid uncertainties over forthcoming tax rises by the new government, during the prolonged lead-up to the October Budget.”

The fund’s longer-term track record stacks up too. Over the 13 years and seven months since launch, the fund has generated NAV and share price total returns of +235.5% and +196.2% respectively, easily trumping the +190.0% and +176.1% NAV/share price returns of the peer group and +123.6% for the Deutsche Numis All-Share Index. No surprise then that the Board’s regular review of the Company’s strategy and approach concluded that these remained “relevant and appropriate”. Well, if ain’t broke. Shares closed unchanged on the day of the results at 94.6p.

Winterflood: “Top ten holdings represented 25% of NAV as at 30 November, with largest sector exposures being Financials (35%), Industrials (18%) and Basic Materials (10%). In July, shareholders will be able to elect to redeem shares at the next redemption point of 29 August 2025.”

Henderson Opportunities’ (HOT) heating up

HOT’s busy year included a strategic review, the drawing up of a scheme of reconstruction offering shareholders a full cash exit at NAV and/or the opportunity to roll into an open-ended fund and, if that wasn’t enough, the unwanted attention of activist investor Saba Capital culminating in a requisitioned general meeting that went in favour of the Board. Didn’t affect the full-year performance though: NAV total return came in at +17.1%, comfortably ahead of the FTSE All-share’s +16.3%. According to the investment managers, the outperformance mostly driven by the portfolio’s holdings in larger companies which offset a weak showing from the small-cap contingent.

As for HOT’s future, well that’s in the hands of shareholders who are due to vote on the scheme of reconstruction at two general meetings to be held on 21 February 2025 and on 14 March 2025. Question is, how will shareholder Saba vote? The results were good for a 1.5p rise in the share price to 229p.

Winterflood: “Small cap overweight (AIM stocks 33% of portfolio) has detracted over time (AIM underperformed FTSE All Share by 55% over last 3 years). Takeover activity aided performance over the reporting period.”

Brunner’s (BUT) all-weather approach

BUT not only clocked up NAV and share price total returns of +17.9% and +39.3% respectively, but the latest full year also saw the global fund win the ‘Investment Company of the Year – Global’ award from Investment Week and promotion to the FTSE 250 Index. Only blot on the report card was that NAV performance couldn’t match the +23.6% clocked up by the composite benchmark (70% FTSE World Ex. UK/30% FTSE All-Share). Although BUT had outperformed the benchmark in each of the previous five years, so was perhaps due a breather. Besides, as the portfolio managers point out, “Most of the underperformance is best explained at the stock level within the Financials and Technology sectors. Both of these important sectors roared ahead. Our holdings participated but did not keep up.” That’s largely down to the managers’ “balanced approach, but also our bias to prudency. This means that we always run the risk of underperforming in a cyclical rally, as happened this year, but we should be better protected on the downside in the event of a cyclical downturn.”

Chair Carolan Dobson adds “Ultimately, our ‘All-Weather’ approach does not mean chasing some kind of absolute return or constant outperformance of the benchmark – rather it means the pursuit of consistent performance”. And Dobson goes on to finish on “a high note” that, although many macroeconomic and geopolitical risks remain, “opportunities to invest in great companies continue to abound.” Market liked what it heard – shares added 5p to close at 1415p.

Winterflood: “Share price TR +39.3%, as discount moved to premium, despite no shares repurchased (aided by index inclusion). First-ever issuance £3.9m. Underperformance mainly attributable to stock selection within the Financial and Technology sectors. Portfolio composition 49% US, 27% UK, 20% Europe.”

Scottish American’s (SAIN) staying true

SAIN’s investment managers described the global equity income fund’s full-year performance as “mixed”. First the good bits, “growth in earnings across the Company’s portfolio was strong. The backbone is our investment in equities, where dividend growth was robust. Income from the property, infrastructure and bond portfolios was also solid. Together, these investments drove growth in the Company’s earnings per share, lifting it 7.6% above the prior year. This strong result underpinned another inflation-beating increase in SAINTS’ dividend to shareholders.” Followed by the not-so-good bits, “NAV growth of the Company lagged global equity markets, as measured by the FTSE All-World, by some way”: +6.1% NAV total return compared to the market’s +19.8%.

The relative shortfall “was due primarily to the more balanced approach that SAINTS takes to investing, and in particular our focus on companies with resilient earnings and income growth.” Problem is, “These were not the type of companies that saw the strongest rises in share prices in 2024.” The investment managers have no intention of deviating from their strategy though “We will stay true to SAINTS’ objective of delivering a resilient income that grows ahead of inflation, while also aiming to grow capital value. Our analysis of the investment portfolio suggests it is well-placed for this task.” And the managers are putting their money where their mouths are “We remain resolutely aligned with shareholders, investing alongside them as owners of SAINTS’ shares.” Investors adopting the wait-and-see-approach – share price was unchanged at 519p.

Winterflood: “Board remains confident in approach and believes discount is cyclical rather than structural. Board expects future market environments to lead to a reduction in ‘manufactured’ dividends or a need to sell assets, hence current income generation method is preferred. US underweight (43% vs. 70%) and Tech underweight detracted, as did quality and income factors. Property and bonds allocation detracted as well relative to equities. Infrastructure (3% of NAV) detracted as well (-3% TR).”