FTSE 100 in 2025 a prediction.
I like to joke; it is much harder to predict the future than the past. However, a future estimation is what you are looking for and if you read this in 2026 you will have an opportunity to marvel or laugh.
Let’s start by looking at the current picture from he Covid pandemic crash.
It is a solid uptrend, if nowhere near the sort of bull run you would look at in the US. From the pre-covid top, till now it’s a very modest performance and anyone in value will have had a tough time from 2022 to mid-2023. Now though many sectors in the FTSE 100 are coming up roses even though it can not be clearly seen in the chart because the market is awash with non-UK conquistadors sweeping in and asset striping the UK market because of its fundamental cheapness. Good news for value investors, bad news for the UK.
So this is what I see next.
The premise is the UK market is trading slowly, but surely upwards, to new pricing ranges where equilibrium is reached and where the market stews until a ‘catalysis’ kicks the price up. This cycle if left uninterrupted should repeat.
If this process remains stable then we will see 9000 next year, perhaps a 10% rise overall.
I don’t want to sink deeper into chart voodoo, but you can clearly see how that would work. Of course, charts do not price in the unknowable and the trend could run shorter or longer than the past. You can also see there is a volatility shrinkage in the recent chart.
Again, this is a trand not fate, but without something wild and unpredictable entering the picture, this volatility shrinkage is bullish. When the market feels the coast is clear, up she will go!
This is not what speculators want to see as it is far to pedestrian but for long term investors and for those who want diversification across currencies the FTSE is a good place to go looking for diversification.
For those who want a bigger reason and perhaps with a more visceral reason to play, here is a chart to wet your appetite.
Yes it helps to be contrarian.
Heads up. When companies slump, there is a call to make for any contrarian. Buy the slump for the bump or leave it alone. It the previous bear a slump has been followed by further sliding whether there is going to be a rally or not. In usual times the bump comes quickly for the half that are solid, leaving the duds to fall indefinitely. So usually the call is to split the good from bad and jump right in, but in the period up to the middle of last year, you might as well sit all slumps out till further notice.
The god news is the bump is back, which is further evidence we are in a bull. So, the trick is now to slpit the pack between bouncers and duds. Crudely bouncers are good companies with large solid businesses with a bit of nasty news. The market still panics so there is about half the fall to be grabbed in the following das and weeks. I look for drops of 15% or more. The giants are at the low end and the medium sized companies at the high. A big solid company dropping hugely is normally to good to resist, but expensive companies need to be heavily considered before jumping in.
In any event, buying the news dump is back, now its just down to estimating whether there is a panic in the price or not. In any event watch these dumps as the come up and follow them for a week or two to get a taste. It’s a good money making prospect if you can get a feel for it.
Now lets have some fun.
This is what happened next and we are navigated this and as of now are happy campers. Well I hope you kind of followed along and managed to get to the current positive outcome.