It has been a banner year for the London stock exchange in some ways. The hit an all-time high, for example. But a mood of gloom pervades much of the City.
The UK is struggling to attract or even hang onto some companies that think they could get higher valuations in other markets. That is reflected in valuations and, in some cases, dividend yields too. I reckon that actually offers a great opportunity for smart investors to take a thanks to the relatively cheap valuations of some FTSE 100 shares.
How to build wealth over the long run in the stock market When it comes to building wealth through share ownership, there are basically two potential drivers. One is for shares to go up in price so that they can be sold for more than was originally paid for them. That price difference only matters when the shares are sold.
So while holding them, an investor may have a paper loss or paper gain but that is all it is. The second method of wealth creation is through receiving dividends. Why low share prices can be good not bad news It might seem that a falling share price is bad news.
But the price is just an indication of what an investor would pay to buy that share, or receive if they sell it. So I reckon a falling share price can be news if an investor has no plans to sell that share and the investment case is unchanged. It can offer an opportunity to buy more shares than previously with the same amount of money.
Plus, dividend yields are a product of dividend per share and share pri.
