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What a year it is shaping up to be in the stock market!
Last week began with people wondering whether the FTSE 100 index of leading British companies might break its own all-time high record set earlier this year, and perhaps march onwards to 11,000.
By the end of a hectic week in the markets however, the mood was very different. Investors were – and are – trying to figure out what a shifting global geopolitical landscape may mean for their portfolios.
Stepping away from the emotion, now seems like a good time to put things in perspective with some data from the UK stock market’s flagship index.
2026 has been positive for the FTSE 100
Having reached new levels – and since fallen back somewhat – the FTSE 100 index is still solidly in positive territory for 2026 to date.
Since the start of the year, the index is up by 6%. That might not sound very exciting, but it is still upwards movement.
It means that £15,000 invested at the start of the year would now be worth around £15,900.
That is not spectacular, but it is still solid in my view.
It is easy to contrast the index’s performance with a particular share that has done well and then see the Footsie’s showing as comparatively weak.
In reality though, a diversified index of 100 shares is always going to perform worse than some of its constituent members, but better than others.
Don’t forget the dividends
On top of those capital gains, there are dividends to consider too. This year, FTSE 100 companies are expected to pay out over £80bn in ordinary dividends to shareholders.
That is an eye-watering amount – and it does not even include special dividends.
Plus, those dividends are not only paid to large institutional investors with costly stakes. They are also paid out to legions of small private investors who put modest amounts into the right shares.
At the moment, the FTSE 100’s dividend yield is 3%. On a £15,000 investment, that equates to around £450 of passive income annually.
I’m looking for individual bargains
In fairness though, I have not been buying the index (for example through investing in an index tracker).
I have been looking for individual FTSE 100 shares I can buy when I think their prices are attractive enough.
One I think merits consideration at the moment is insurer Aviva (LSE: AV).
Its performance so far this year is broadly in line with the wider FTSE 100, moving up 7%. Over the past five years it has increased by 83%.
Aviva has a 5.5% dividend yield, well above the FTSE 100 average I mentioned above. Although it cut its payout six years ago, it has been growing it handily each year over recent years.
The insurer is more focused on its home UK business than a few years ago, having sold some overseas businesses and bought local rival Direct Line. That poses a risk if competitive pricing pressure hurts profit margins in the UK insurance industry.
But as the nation’s leading general insurer, I see its large customer base, long underwriting experience and proven cash generation ability as significant strengths.
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Christopher Ruane does not hold any positions in the companies mentioned.
This story originally appeared on Motley Fool
