Final month, the FTSE 100 index of main British shares hit a brand new all-time excessive.

Within the weeks since then, nonetheless, it’s gone into reverse. The index is round 3% decrease than the excessive it hit final month.

Now, 3% may not sound like a lot. However over the previous 5 years, the FTSE 100 has grown by solely 11%. Inside that context, a 3% fall in a matter of weeks is definitely fairly massive.

What’s occurring – and the way can I greatest place my portfolio in response?

Lengthy, lazy summer time

I believe numerous this may merely be a manifestation of the previous inventory market adage “sell in May and go away”.

Whereas which will sound simplistic, springtime typically sees a cluster of full-year outcomes. This 12 months, a few of these got here in strongly and pushed up share costs.

However because the Metropolis will get quieter and ideas drift in the direction of a soothing summer time, exercise and costs within the inventory market can even lose some momentum.

Valuations proceed to look low cost

Somewhat than making an attempt to time the market, the strategy I take is just to search for worth always.

Whereas the FTSE 100 index appears to be cooling its ft after hitting a brand new document, that doesn’t inform me something about particular person shares inside it.

Over the previous 12 months, for instance, Rolls-Royce has greater than tripled. In contrast, raincoat maker Burberry (LSE: BRBY) has skilled its personal patch of stormy climate and misplaced over half its worth.

I’m not shopping for the index as an entire, however slightly I’ve a portfolio of particular person shares. So, whether or not or not the FTSE 100 is shedding momentum in the meanwhile, I proceed to look out for what I believe may very well be bargains.

Trying to find shares to purchase

May Burberry be simply such a cut price? It has an iconic model, world fan base, premium product pricing, and a dividend yield of 6.3%.

Final month, the style home launched its full-year numbers they usually have been removed from stylish.

It held the dividend flat, which means that for now that pretty juicy yield stays. Income declined 4%, which isn’t nice however equally I don’t suppose is catastrophic.

But it surely was on the backside line, not the highest line that issues grew extra alarming. Reported working revenue slid 36%. Attributable revenue fell extra, at 45%. Free money movement crashed 84%.

Slowing demand within the luxurious sector harm Burberry and its model struggled to take care of traction with fashionista customers.

Doable FTSE 100 cut price

I’m torn right here.

The yield is engaging, the model has underlying strengths even when it has been performing weakly. The corporate has plans to enhance efficiency.

However, demand on the pricy finish of the rag commerce might worsen earlier than it will get higher. This might change into a high-yield cut price, however it could equally finish up being a falling knife.

So, for now, I’ll carry on in search of different FSTSE 100 shares I may add to my portfolio.