Time to start investing in Banking again?

cwfm

Due to the recent doom and gloom of the credit crunch in the media investors have been selling shares or wary of buying shares in the banking sector.

I have been keeping a close eye on this and it seem with the big banks are still pulling in significant profits and share prices still seem to be preforming.

As an armature investor i would be interested in hear what everyone thinks about investing now in major banks. Would now be a good time to buy?

mr_fishbulb

I don't think it is just because of the media coverage that investors have been bailing from finaincials - something is fundimentally wrong in that system at the moment and credit crunch repercussions are far from over.

Just becuase the prices have falled doesn't necessarily mean they are due an upswing. You have to ask yourself why they dropped in the first place, if those conditions are still acting, and what you believe the future holds.

amcluesent

IMHO we're in a classic bear market rally, this is your last chance to liquidate equities and other 'bubble' assets like flats in Northern towns. The rally might last until May, then we'll see another slump. All the Ponzi schemes are collapsing and the BoE/Fed are pushing on a piece of string trying to inflate away the problem. The big layoffs are just starting, the dominoes have started falling in financial services but there's a long, long way to go. Plus the Treasury haven't got a brass farthing as Labour overspent even in the good times; wouldn't have been prudent to save for the rainy days?

There is still ££££ Billions of leveraged positions, uncovered debt and unabashed frauds and scams. Just take a look at 1929-32, every time the market ticked up, people called a bottom and then lost money in the next decline. Seriously, once stocks are 90%+ off their peak, then you can say there's bargains. Maybe.

ad44downey

cwfm wrote: »

Due to the recent doom and gloom of the credit crunch in the media investors have been selling shares or wary of buying shares in the banking sector.

I have been keeping a close eye on this and it seem with the big banks are still pulling in significant profits and share prices still seem to be preforming.

As an armature investor i would be interested in hear what everyone thinks about investing now in major banks. Would now be a good time to buy?

Buy Lloyds TSB. It's an absolute bargain. It has very little exposure to sub-prime and the dividend yield is over 8%, you won't get that return in a bank account!

Aegis

ad44downey wrote: »

Buy Lloyds TSB. It's an absolute bargain. It has very little exposure to sub-prime and the dividend yield is over 8%, you won't get that return in a bank account!

Of course, the dividend isn't guaranteed, nor is the capital value. Sticking these shares into your portfolio as part of a diverse holding might be ok, but buying them just for the dividend might not be great given that 8% of half the original value is only the equivalent of 4%.

Financials are invariably going to be tarred with the same brush, so when some of them drop, the rest are going to be dragged down with them to some extent.

Personally I wouldn't rebuy any Lloyds shares, but then I don't invest directly in equities.

Cozworth806

Lloyds is heavily invested in the UK, so a serious UK downturn will affect this far worse than others. You pays your money, I have Barclays shares only, but am still toying with splitting that into RBS as well, to diversify risk.
If you decide to invest it may be better to dripfeed the investments either by way of a UT, or staged investing directly by pound cost averaging

napoleon

UK bank shares are great value IMHO. Apart from Bradford and Bingley and Alliance and Leicester of course, avoid those two like the proverbial plague :T

boy_3

Probably a million dollar question at the moment. Who knows? Personally, I wouldn't buy into banking stocks yet even when I know that a bank is not affected by sub-prime. Shares are not always controlled by fundamentals and even a tick in sentiments can bring another dip in financials.
If you really want the high risk, you can try some banks, otherwise stay away I say. Probably metal,oil and even tech is a good choice.

pjala

Moneyweek advises against banks, very volatile at the moment so if you buy you are buying into risk. It appears that "safe as banks" is really only as safe as the taxpayers money that is flooding into financial stocks to keep them afloat...

spencer24

I think banking stocks will go down a lot in the near future. Also not all of the banks will survive the current downturn in my opinion.

Browntrout_2

Yes I think it is a good time to invest in Financials shares, although probably best leave it to fund manager or else you are second guessing...

I like New Star Global Financials which is found in the Specialist Sector.