All stock market forecasts should begin with the following warning: Stock markets are unpredictable beasts in the short term, so it’s a bad idea to have strongly held beliefs about where they'll be at the end of the year. But that doesn’t mean investors are completely in the dark. We do, after all, have decades of history to lean on. That history enables us to make fairly sensible statements about the fair value of indexes like the FTSE 100 and FTSE 250, as well as the odds that they'll go up rather than down over the next year. Forecast 1: The FTSE 100’s fair value will be 9,000 at the e ..read more

Five long years have passed since the pandemic began, and yet its aftershocks are still ringing around the world, causing political and economic difficulties. The good news is that those aftershocks are now much smaller than they were several years ago, but 2024 was still another tough year for the UK stock market and most UK companies. As for the UK Dividend Stocks Portfolio, almost none of its holdings had anything positive to say about their operating environments last year, and those that did were benefitting from factors most would consider negative. For example, high interest rates suppo ..read more

2024 is coming to an end, I'm about to put my slippers on, sit in front of a roaring fire and dig into some Marks & Spencer mince pies. Ah, the good life. Before I log off until next year, there's one last traditional obligation to fulfil, and that's to publish a list of the year's most popular posts from the UK Dividend Stocks Blog. And so, without further ado, here are the posts that most caught readers' attention in the not entirely fantastic year that was 2024: (1) FTSE 100 valuation and forecast for 2024 (2) The UK’s 20-year house price bubble may finally be ending (3) FTSE 250 v ..read more

The S&P 500 has been the index of choice in the wake of the 2008-9 global financial crisis. With dividends included, the US large-cap index has returned almost 1,000% since early 2009, which in annualised terms is an exceptional 17%. This has been fantastic for investors who made their fortune riding this bull, but bulls can also be destructive. If you’re riding high on the back of one, make sure you’re wearing safety gear. Bulls are okay, bubbles are dangerous There is nothing wrong with bull markets. They draw in new investors, they make it easier and cheaper for companies to raise produ ..read more

As investments go, Direct Line has been a mixed bag. The shares initially fell more than 50% shortly after I'd bought them, and then rebounded by about 100% following a recent takeover offer from Aviva. This rollercoaster ride began in January 2022, when I first added Direct Line to the UK Dividend Stocks Portfolio (and my personal portfolio). A big part of the attraction was the stock’s 8% dividend yield, but there was more to it than that. A brief history of Direct Line’s past Direct Line is a classic case of first-mover advantage. It was the UK’s first direct insurer, offering car ..read more

Of all the companies I’ve invested in over the last few years, there’s a good chance that Hargreaves Lansdown (HL) was the best. It was started by Peter Hargreaves and Stephen Lansdown in 1981, with the pair initially operating out of Hargreaves’ spare bedroom, and it has been a spectacular success almost from day one.  The initial idea was to sell unit trusts through the post, with clients acquired through newspaper adverts. This was by no means a novel approach, but Hargreaves’ marketing genius and desire to build the biggest financial advice firm in the UK, along with Lansdown’s d ..read more

Over the last few years, I have added layers of complexity to my diversification rules in an ongoing attempt to optimise the structure of my dividend portfolio. I’m not complaining because I enjoy tinkering as much as the next person, but I want my investment strategy to be usable by as many people as possible, and most people only have a few hours to review their investments each week, or perhaps even each month. With that in mind, I've taken a hatchet to my diversification process and it has now been stripped back to a handful of essential rules that always did most of the heavy lifting. Tho ..read more

When I added Headlam Group to the UK Dividend Stocks Portfolio in 2018, it was (and still is) the UK’s leading distributor of carpets and other floorcoverings. It also had a consistent track record of strong growth following the financial crisis of 2009. As the market leader, Headlam brought together the largest number of suppliers and customers and, like Rightmove or Amazon, that gave it a network effect, where having the most suppliers and products attracts the most customers, and vice versa. Unfortunately, Headlam’s performance over the last few years has been disappointing and it rece ..read more

I’m an incurable tinkerer, so during the brief, intermittent and generally disappointing summer of 2024, I spent a fair amount of time dreaming up ways to improve how I select, value and manage a portfolio of dividend stocks. Eventually, I came up with a handful of tweaks that should help me (and perhaps you) build a more concentrated portfolio of higher-quality stocks, purchased and held at more attractive valuations.  Today, I’ll focus on the quality-related changes that I've made, and in a couple of follow-up posts, I’ll cover the changes that relate to valuations and portfolio concent ..read more

Next (one of the UK's leading clothing and homewares retailers) is an exceptional business by almost any standard, especially as it doesn’t seem to have any structural competitive advantages like market dominance or network effects. Despite this lack of structural advantages, Next has grown its earnings per share from 93p to 656p over the last 20 years, and its dividend from 35p to 207p. Next's share price has responded to that growth by increasing more than seven-fold from £13 in 2004 to over £100 today. Those results are impressive. They’re all the more impressive because they were achieved ..read more