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Van

Ftse In 2006

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Opinion is, as ever, divided on whether the stock market will go up or down.

On Friday December 30th the FTSE 100 closed at 5619.

Personally, I am bullish, and think that a 10-15% rise is within reason, based on fundamentals. That would take the FTSE somewhere between 6181 - 6462.

5 year chart:

_ftse.gif

Articles:

http://uk.biz.yahoo.com/moneyweekly/stocksshares2006.html -

Excerpt:

"Stock markets around the world have enjoyed a pretty good run in 2005. In Britain , for example, the FTSE 100 index of the biggest companies is up more than 15%. “We began 2005 heavily overweight equities and have not been disappointed. Equities have risen sharply across all major markets,” said Paul Niven of F&C Asset Management, one of the biggest fund managers.

Shares have been bolstered by strong corporate earnings and resilient global growth. Equities also seem relatively cheap. Niven said: “Share prices have not kept pace with earnings growth, so although markets have ended the year higher – equity valuations have actually not become any dearer.” The big question is: will stocks and shares continue to do well in 2006? Or should we take our profits and run – or at least stuff the money in a savings account?

Stuart Fowler of AXA Investment Managers is keeping faith with UK equities. He said: “We expect another good year for the stock market in 2006. The market's valuation is OK, the international economic outlook is broadly supportive, and takeovers are likely to be a feature again - corporate activity always gets the market's juices flowing.” He even dares to hope that investors might get over their infatuation with property. “The stock market has been rising steadily since March 2003. Surely there must come a time when the love affair with buying houses wanes in favour of shares again.”

"

I shall strive to update this thread periodically.

Edited by Van

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think the markets could surprise a few people and head south early in the new year

The FTSE 100 is up 0.57% now - obviously everything is very rosey with the world. We've got no energy crises, retail sales are booming, consumers have paid off all their debt and are spending like there's no tomorrow, house prices are surging ahead. Pile in now while you can ;)

Regards,

crude

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6,200 year end for FTSE100

10,000 year end for FTSE250

THE FTSE100 and FTSE250 used to be level a few years back !

Edited by penbat1

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Does anyone know where I can find a historical sheet showing the lvels of the FTSE 100 on specific dates?

The key figure I am looking for is the Year End figure for 2005.

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http://news.ft.com/cms/s/71c46c48-7eab-11d...00779e2340.html

FTSE expect to reach 6,000 on merger activity

By Charles Batchelor

Published: January 6 2006 12:34

Fund managers and independent advisers expect the FTSE 100 Index to rise further during 2006, according to an industry-wide survey.

Ninety-two per cent of financial advisers expect the market to rise overall while 77 per cent of fund managers shared their optimism.

Actually I would be disappointed if it "only" reached 6,000, as that is only 4.8% away. I'd consider that a very poor return for my investment.

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imho ftse will breach all time high, 7000 in 2006 me thinks.

What makes you think that the FTSE will rise so high? Ive no idea - just interested in you're reasoning.

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Markets everyone taking a hell of a beating this morning.

FTSE down 1% @5644.

11,000 looks on the Dow like a bull trap.

Trading suspended on the Nikkei overnight, -4.6%, after a similar fall yesterday!

Oil back above $67 pb.

That is all!

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I'm not worried yet. Downside to a possible 5350 will still see the uptrend intact. Markets were very overbought heading into new year and correction was inevitable. Question is will it be a short sharp sell off like October, or a longer drift down like Apr/May/Jun.

Any case, I'm partially hedged with a short on the Dow..

Edited by Van

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Personally, I am bullish, and think that a 10-15% rise is within reason, based on fundamentals. That would take the FTSE somewhere between 6181 - 6462.

if this is your position i would be worried

Edited by Milkshock

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I'm not worried yet. Downside to a possible 5350 will still see the uptrend intact. Markets were very overbought heading into new year and correction was inevitable. Question is will it be a short sharp sell off like October, or a longer drift down like Apr/May/Jun.

Any case, I'm partially hedged with a short on the Dow..

So far in 2006, on down days like today the FTSE250 has in general decreased significantly less in percentage terms than the FTSE100. This happened today. The FTSE250 is not showing any weakness relative to the FTSE100 as yet and is continuing its healthy 2005 trend.

Edited by penbat1

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as far as im concerned the stock market is, in its own way, nearly as over valued as the housing market

Only if you think stocks should be on a future P/E of 5, ie 20% earnings!

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as far as im concerned the stock market is, in its own way, nearly as over valued as the housing market

Milkshock, please can you expand on this. FTSE trades on 14 times earnings, compared to property which is valued at roughly 20 times earnings. Traditionally FTSE should be valued higher because of the higher long term growth. When interest rates are low, the risk-free rate of return is low, and thus asset prices should be higher to reflect this.

Just because the market has nearly doubled in 3 years doesn't mean anything - if profits have doubled, it's just as good value (it's not as quite as simple as this, because you have to factor in likely growth and interest rates, but the underlying fundamentals still stand).

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So far in 2006, on down days like today the FTSE250 has in general decreased significantly less in percentage terms than the FTSE100. This happened today. The FTSE250 is not showing any weakness relative to the FTSE100 as yet and is continuing its healthy 2005 trend.

FTSE250 typically outperforming the FTSE100 on up days as well such as today.

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