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The stakes are high for the stock market, as the recent US technology sell-off sparks talk of a potential crash heading our way.
Things are getting tense in the run-up to the SpaceX IPO on Friday (12 June). That’s hardly surprising, given that it’s the biggest ever. And it involves Elon Musk, who’s never far from the headlines. And who may soon write new ones by becoming the world’s first ever trillionaire.
If investors get behind SpaceX, its valuation could fly past the $2trn mark. Or it might implode on entry. No wonder investors are getting jumpy. They’re worried about artificial intelligence, too. Will the hyperscalers get a return on the hundreds of billions they’re pouring into data centres?
What should investors do now?
So what’s a humble FTSE 100-focused investor supposed to do about all this? Whichever way this goes, we’ll be swept up in events too.
First, we need to keep our feet on the ground. At The Twelfth Magpie, we buy shares for the long run. We don’t advise second-guessing markets, because nobody can say what they will do next. Selling up ahead of a potential crash is daft. Most never happen.
But we do like buying shares after a dip or crash. This allows us to purchase our favourite FTSE 100 stocks at a lower valuation and bag a higher yield. Then we sit back, relax, and give the share price time to recover, and for our reinvested dividends to compound and grow.
Are NatWest shares tempting today?
One stock I really like right now is NatWest Group (LSE: NWG). In fact, I like it so much I bought it last month. And now I’m tempted to buy more.
NatWest shares will never fly to the stars. It has no ambitions to build a space station or establish extra-planetary life on Mars. Mostly, it’s content to offer everyday banking services to consumers and small businesses in Britain. And that’s fine by me.
Given its modest ambitions, NatWest shares have done rather well. They’re up 188% over the last five years. With reinvested dividends, the total return will be closer to 215%. That would have turned £10,000 into £31,500. Not bad.
Despite that strong run, they remain surprisingly cheap with low trailing price-to-earnings ratio of 8.8. Looking at that, you’d have thought the shares were struggling, not flying. The same goes for the dividend. That’s a handsome 5.35%. Better still, the shares are forecast to increase to 6% this year, and 6.7% in 2027. Just remember dividends aren’t guaranteed.
Banking stocks are plugged into the economy and if the UK’s troubles intensify, NatWest could take a knock. Demand for mortgages could fall, while bad debts may rise. Its shares will also suffer if we get a US tech crash, as will most of the market. But I’m backing the bank to build wealth steadily over the years and think it’s well worth considering. I’d rather buy it today than take a blind punt on SpaceX.
Should you invest £5,000 in NatWest Group Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if NatWest Group Plc made the list?
Harvey Jones owns shares in NatWest.
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