This is my first post this week. I’ve had internet problems since last Friday. I now have super-fast full-fibre but I’m waiting for the router to be delivered to connect it!
We are seeing political change here in the UK with the Prime Minister, Boris Johnson on his way out. He was at least enthusiastic and not too far-right. Who is there to replace him? I don’t think little Rishi would be a good choice he is too keen on fiscal tightening. I thought Matt Hancock did a good job as Health Minister throughout the pandemic. We really need someone who really understands economics though. The current plan to give the cost of living payments to the least well-off seems a good one. Painful as it might be we need to rein in the spending of the middle classes. Could they be persuaded to invest instead of spend?
I’m still favouring banking and oil as top investments. The oil price did drop below $100 this week and that drove down the share prices of the oil majors but I think high oil prices are here to stay, at least until the conflict in Ukraine is over. The boss of Shell thinks we will see high oil prices until 2024. We need to move from oil to renewables and both Shell and BP are moving in the right direction. Shell is exploring opportunities with hydrogen as a fuel.
Recovering from the pandemic
A lot of companies are recovering slowly from the pandemic. Do they put up prices or try to absorb the increased costs? Brewers like Marstons seem to be struggling and their share price could be a bargain at 44.2p. Their prices seem very competitive, especially for their beers in the supermarkets. We are having a heatwave next week which should be good for business!
Buying the lows
There are bargains to be had just now. The pound is just hovering around £1.20 so there are bargains on the London Stock Market for US investors. The US markets have been in a negative mood for a while. For the US investors buying banking and oil majors on the UK stock market could give them a double return. They can profit from rising oil prices and interest rates and when the pound starts to recover profit from that too as a bonus!
Cost of living
As the cost of living rises so our discretionary income shrinks so we need to stay sharp and look for good investment opportunities. We also need to think long term. I get the impression that many people are selling investments to bolster their bank accounts that are being depleted by inflation. Lots of cash is useful at the moment! We are in for an expensive winter of high energy costs. Gold has dropped again to £1450.79 so maybe the gold bugs are selling and favouring cash too?
Please remember the contents of this post are ideas and opinions only; I don’t intend it as financial advice. Talk to a financial advisor for financial advice.