In a number of methods, 2024 has been an excellent 12 months thus far in terms of the flagship FTSE 100 index of main corporations.

The FTSE hit a brand new all-time excessive and is 7% increased than it was initially of the 12 months. It’s 16% increased now than it was 5 years in the past.

Regardless of that, I feel some FTSE100 shares nonetheless look low cost.

So ought to I pile in now whereas I nonetheless can? Or may there be a hazard lurking in the truth that some shares proceed to look tastily valued?

The bull case

For example, think about Normal Chartered (LSE: STAN).

Over the previous 12 months, the share price has barely moved. It us up lower than 1%. Over 5 years, it has outperformed the FTSE 100 total and moved up 21%.

Nonetheless, it appears low cost.

Not solely is the Normal Chartered share price now lower than half what it was in 2010, the price-to-earnings ratio is underneath 9.

Normal Chartered is a big multinational financial institution with an enormous buyer base, energy in growing markets and lengthy expertise throughout a number of financial cycles. Pre-tax earnings rose 5% within the first half in comparison with the identical interval final 12 months.

On prime of that, it has a yield of over 3%. With some FTSE 100 yields approaching high-single-digit percentages, which may not look nice. However I’d be completely happy incomes over 3% of my funding yearly in dividends, presuming they’re maintained on the present stage.

The bear case

Then once more, perhaps the truth that the share price has gone nowhere previously 12 months is an indicator I want to think about.

Banking efficiency within the UK may endure as a weak economic system pushes up mortgage defaults. Issues could possibly be even worse elsewhere – together with some growing markets. In contrast to FTSE 100 friends similar to Natwest and Lloyds, they kind a key a part of the Normal Chartered enterprise.

That story – of home challenges within the UK economic system mixed with wider worries – helps clarify the weak spot of many FTSE 100 shares lately, I really feel. The UK inventory market lacks the colourful tech sector that has helped energy US funding sentiment lately.

The British economic system doesn’t look in nice form and ongoing political uncertainty has dampened some buyers’ enthusiasm for the market. In different phrases, perhaps many FTSE 100 shares are priced the best way they’re for a purpose – and usually are not as low cost as they might first appear.

What I’m doing now

I feel there are some causes many buyers have been avoiding the UK market. That would proceed to be the case, so simply because some FTSE 100 shares look low cost now doesn’t forestall them falling from right here. Certainly, if we see a big international financial downturn, they might go down rather a lot.

However I’m shopping for! Why?

As a long-term investor, I need to purchase elements of nice companies for lower than I feel they’re finally value. I reckon numerous FTSE 100 shares meet that description for the time being, so this summer season I’ve been taking the chance so as to add some to my portfolio.

I don’t just like the dangers within the banking sector at the moment, so Normal Chartered has not been one in every of them.