Instant view: Russia's rouble weakens past 100 per US dollar

Instant view: Russia's rouble weakens past 100 per US dollar

 After a difficult year, British shares have fallen out of favor with investors. Paradoxically, it makes me want to buy them.Many investors, especially those just starting out, like to throw money at top performing stocks in the hope that their good form will continue.

 I resist this for two reasons. First, Murphy's Law dictates that I will shop as soon as the stock runs out. I overpay and the value of my property goes down. Second, I prefer to buy cheap stocks that have been overlooked by the market. This way I get a lower entry point and more recovery potential.

I'll buy what's not popular before it recovers

It is not a fail-safe strategy. That top player I just avoided may continue to fly, while my reduced price purchase may have been cheap for a very good reason. Overall I did pretty well though.With £2,000 to invest I wouldn't be able to buy all the shares I wanted. Investing £200 in 10 shares is a bad deal. My online platform charges £6.99 per trade so buying 10 different stocks would cost me nearly £70 before I started.

The platforms may be cheaper than they used to be, but there are other hidden fees. These include stamp duty on share purchases, bid/offer spreads on some shares and dividend reinvestment charges. So I wouldn't invest less than £500 in any stock and ideally £1,000.

An ideal direct equity portfolio should contain at least 15-25 companies. So I would focus on a couple that I really liked today and build my position over time. I'm talking about investing real money here, so I wouldn't jump at the first stock that catches my eye. Instead, I would look at the basics of business.

Does it make a profit? Is that profit growing? Are its margins increasing? How much debt does he have? Does it pay a dividend? Has it gradually increased payouts to shareholders over time? Could smaller, more nimble entrants steal their customers by offering the same service for less?

I like cheap FTSE dividend stocks

I would also look at a key figure called the price-to-earnings ratio, or P/E. This takes the company's stock price and divides it by the annual profit. A value around 15 represents a real value. As a fan of cheap UK stocks, I'd be looking for something much lower.

Today, a bunch of FTSE 100 household shares are trading at less than seven times earnings, which strikes me as incredibly cheap. These include British American Tobacco, Taylor Wimpey, Legal & General Group, Lloyds Banking Group, Barclays, Persimmon and Centrica.

Most of the stocks I have listed also offer generous yields. Taylor Wimpey and L&G yield 7.99% and 8.42% respectively. As with all stocks, there are risks. Today's uncertain mortgage market is threatening sales at Taylor Wimpey, while L&G's fund management division is struggling with stock market volatility.

To overcome short-term problems like this, I buy stocks with the goal of holding them for at least five or 10 years. This gives them plenty of time to get back into favor. By reinvesting my dividends and adding to my portfolio when I have more money to spare, I expect the value of my UK shares to compound over time and grow dramatically.

In a significant market development, the Russian ruble crossed a key level and weakened below 100 per US dollar. This milestone has implications not only for the Russian economy, but also for global financial dynamics. Let's dive into the reasons behind this decline, its potential impact, and what it means for investors and traders.

Geopolitical tensions: Russia's geopolitical challenges are putting pressure on its currency. Ongoing disputes with Western countries, economic sanctions and uncertainty in international relations played a significant role in this decline.

Commodity price volatility: Russia relies heavily on its energy exports, such as oil and natural gas. Fluctuations in world commodity prices can have an impact on the value of the ruble, particularly during periods of uncertainty or rapid price changes.Inflation Concerns: Like many other economies, Russia is struggling with inflation. A high rate of inflation can erode the purchasing power of a currency, leading to its depreciation.

Global implications:

The weakening of the ruble above 100 to the US dollar has wider implications beyond Russia's borders: Trade relations: For international businesses trading with Russia, this decline could affect import and export costs. Companies with significant exposure to Russian markets will need to carefully monitor currency fluctuations.

Investor Warning: Investors with holdings in Russian assets such as stocks or bonds may experience increased volatility. Currency depreciation can affect the value of these investments. Emerging markets: A fall in the ruble could affect other emerging market currencies. Investors tend to move funds between emerging markets in search of the best returns. A weakened ruble could lead to adjustments in these portfolios.

Opportunities for traders:

For traders, this event presents both risks and opportunities: Diversification: Traders can use the weakening of the ruble as an opportunity to diversify their portfolios. Investigating assets denominated in other currencies can be a strategy to mitigate risk.

Forex market: Forex traders can profit from currency pairs involving the ruble and take advantage of increased volatility in the market. Commodities: Due to Russia's status as a major commodity exporter, traders can also monitor commodity markets for potential price movements affected by the depreciation of the ruble.

The Russian ruble crossing over 100 per US dollar is a remarkable development with far-reaching implications. Geopolitical tensions, commodity price volatility and inflation concerns contributed to this decline. While this presents challenges for the Russian economy, it also creates opportunities for traders and investors to make strategic moves in response to changing market dynamics. Staying informed about global events and their impact on currencies is essential in today's interconnected financial environment.