The FTSE 100 received’t be the most effective place for each investor. No, everybody must base their selections on their very own wants and their very own research. But it surely’s the place I most need to put my cash in 2024, and past.

Over within the US, each the S&P 500 and Nasdaq hold hitting new all-time highs. In reality, the S&P 500’s up 23% to date in 2024, whereas our pricey outdated FTSE 100 has placed on simply 9%. And the Footsie nonetheless hasn’t matched the 52-week excessive of 8,474 factors it reached as way back as Could.

So the UK inventory market’s a loser then, and greatest averted? No, it’s nonetheless my favorite, for a number of key causes.

However low, proper?

The primary cause is that I need to purchase shares once they’re low cost. Isn’t that what everybody needs? It’d make economists comfortable when inventory markets are buzzing. But when we plan to maintain shopping for shares for the long run, we should always certainly need costs and valuations to remain low.

My different key cause is that I am going principally for dividend shares, and the FTSE 100 has among the greatest yields I can discover. We’re taking a look at a forecast common dividend yield of three.7% this 12 months, together with all of the low ones, rising to 4% in 2025. That’s simply unusual dividends, and doesn’t embrace any specials.

And we even have what must be a long-term increase from the £50bn in share buybacks which were introduced to date in 2024.

Lengthy-term favorite

For instance, let’s have a look at one in all my high FTSE 100 shares, Aviva (LSE: AV.)

The five-year share price chart above, may not look nice. But it surely’s precisely what I would like, and I hope it stays unimpressive for at a number of extra years but.

What it means is I can purchase extra Aviva shares on a ahead price-to-earnings (P/E) ratio of 12 this 12 months, with forecasts dropping as little as 9.2 by 2026 (primarily based on at this time’s price).

And I may snag a fats 7% dividend yield, if these forecasts are correct. Oh, and the analysts suppose it should carry on rising within the subsequent few years too.

Dangers

The Aviva dividend, like every dividend, isn’t assured. The insurance coverage sector carries cyclical danger too, and at this time’s upbeat outlook may change faster than we’d count on. Inflation and rate of interest uncertainty don’t assist.

Investing on this sector, as in any sector, means we have to perceive the companies we purchase. And that brings me to a different cause why I like FTSE 100 shares a lot.

I perceive the insurance coverage sector moderately effectively, particularly within the context of the UK market and financial system. And that should give me a bonus.

Backside line

So to sum up, investing in FTSE 100 shares places me in companies I perceive within the financial system that I do know greatest. And at instances like these, it could actually maximise my probabilities to purchase low cost, and hopefully lock in years of dividend earnings.

Oh, and there are different FTSE 100 sectors I additionally like and perceive, additionally at good valuations. So there’s loads of scope for diversification.