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Like most people, I have been increasingly concerned about the UK economy in recent months. Red flags, including inflation, interest rates and more, are all putting pressure on the stock market. For now, the market is holding up well. There are several reasons why (despite the bleak outlook) I don’t think it’s time to sell mine FTSE 100 Shares.
Time off the market
One concern I have is trying to time the market. I have sold stocks in the past because I thought a downturn was coming. I made a mistake and missed some of the next lineup when I was sitting on cash.
This time may be different, but in the end, I don’t have time right now to make the call. The FTSE 100 is up more than 5 per cent on the previous year. Last month, it fell a modest 0.8%. Even with a bleak view, I don’t see any tangible signs that the market is slowing down. On that basis, I think selling now may again have high opportunity cost.
Fiscal packages are offered.
Last week, the new Prime Minister announced reforms to energy bills. The support of businesses was also announced. In the coming weeks, I expect Chancellor Kwasi Kwarteng to announce additional fiscal spending plans to support the economy.
Now, I don’t know if the energy package is enough to support the UK. I also don’t know what new funding will be announced soon. But I don’t think it’s a smart move for me to sell my shares now before I get the full details.
It may be the case that corporations are taking advantage of the aid provided by allowing the market to rally at the end of the year. Time will tell, and I think it would be a bad choice for me to sell before seeing what happens.
Viable options for FTSE 100 shares
Ultimately, I still think stocks can give me the best return compared to others. Even with higher interest rates, I’ll pay back very little on a Cash ISA. What about crypto? The price of Bitcoin has dropped by 50% in the last year. Bonds maybe? UK 2-year government bond prices have fallen by 5% over the past year.
From that point of view, I think now is a bad time to sell because there aren’t a lot of asset classes out there.
Obviously, this is just my opinion. If we see a crash coming in the coming months, history may not treat me kindly. In my view, I think the main danger is centered around tensions with Russia. If we see things escalate, this could definitely cause the stock market to wobble. But until that becomes clear, I’m sticking to my core view and FTSE 100 stocks.