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Broadly speaking, the UK’s large- and mid-cap stocks have staged an impressive rebound of late. Yet even after this recovery, the valuations on FTSE 100 and FTSE 250 shares are still remarkably low by global standards, offering what may be a rare opportunity for investors to build long-term wealth.
Right now, the price-to-earnings (P/E) ratios for the Footsie and the FTSE 250 are 16.2 times and 12.6 times, respectively. That’s a huge discount to the S&P 500, whose ratio is 23.8 times, and the Nikkei 225, which has a multiple of 19.3.
This suggests there could be significant scope for capital growth, though valuations aren’t the only reason I’m bullish today. Historical market trends also suggest UK shares could experience a substantial upswing.
FTSE 100 in focus
Let’s take the FTSE 100 as an example. According to data from Curvo, investors have often enjoyed their…
