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Legal & General places faith in stock market

27 June 2005
According to Legal & General, current equity values are indicating that it could be the ideal time to get investing in the stock market.

The financial institution indicates that the crash of March 2003, when the UK equity market fell to levels that hadn't been seen for a decade, is now far behind us, and the FTSE 100 has rallied by more than 50 per cent.

A relatively good performance from the UK corporate sector in recent years has helped drive equity values higher, Legal & General found, whilst the free cash flow yield has risen from a low of 5.5 per cent in December 1999 to 10.5 per cent.

This extra cash flow has led to an increase in dividend payouts, special dividends and share buy-outs - dividends are expected to grow by nine per cent this year, bringing good news for both existing and prospective shareholders.

"We believe the FTSE 100 Index should continue to rise in the medium term offering investors, who enter the equity market now, a potentially higher return than they may get by leaving their money on deposit," said Claire Stracey, marketing director for retail investments at Legal & General.

"As equity markets continue to move forward, boosted by higher returns from dividends, investors should consider investing in an equity ISA to take advantage of potential tax savings."

UK equities may offer a seriously attractive option for investors with an eye on the longer term, Legal & General asserts.

Click here to find out more about investing in the stock market.

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