Over in the Mail on Sunday, Joanne Hart spent her 'Midas' column looking at investments she believes could help shield readers from the kind of rollercoaster rides seen on the stock market last week.
She noted that the volatility could be put down to solid economic growth in many parts of the word, leading to fears that interest rates could soon rise.
That spells bad news for equities, as higher interest rates make it more expensive for boards to make borrowing decisions, and leading investors to stray towards the improving yields of bonds.
Hart's top pick of her 'shield' investments is insurance giant Aviva, which has experienced a successful turnaround since Kiwi group chief executive Mark Wilson took the ropes in 2013.
In November, Wilson signalled that dividends would now be higher than analysts were expecting, thanks to faster growth and a £3bn surplus cash pile.
The company's results are due next month, with a dividend of 26p anticipated, rising to 30p for 2018 and 34p for the 2019 financial year.
That makes for a stock yield of more than 5%, with the distributions rising at one of the fastest rates among Aviva's FTSE 100 peers.
It was still expanding as well, with its policies on offer through several high-street banks, and its savings and pension operations continuing to grow through acquisitions.
"Aviva shares have fallen from 534p in January to 486.5p today, at which point they are a long-term buy," Hart said.
"The dividend alone makes this stock appealing while the long-term growth prospects should provide further momentum."
Insurance group Aviva highlights the way in which strong leadership and smart management can transform a business.
When Mark Wilson joined in early 2013, the insurance group was in a sorry state, having expanded in too many directions and amassed too much debt.
Wilson cut the dividend and sold off unprofitable businesses to create a simpler and stronger company.
Today, Aviva is reaping the rewards and the shares, at 486.5p, offer solid, long-term growth and attractive dividends.
Last November, Wilson said that dividends would be higher than analysts anticipated because the company was growing faster than forecast and would have £3 billion of surplus cash in 2018 and 2019.
Brokers interpreted this to mean double-digit dividend growth for the foreseeable future, with special dividends or share buybacks possible too.
The group's results will be out next month and a dividend of 26p is expected, rising to 30p for 2018 and 34p for the following year.
This means the stock is yielding well over 5 per cent. Aviva's payouts are not only rising at one of the fastest rates among FTSE 100 companies but the increases are backed up by strong sales and profits growth.
The company offers general and life insurance and is doing well in both. Last summer it signed a 10-year deal with HSBC so the bank will offer Aviva insurance products to all its customers, one of the largest transactions of this kind in years.
Aviva policies are also on offer at Barclays, Santander and the Co-op, as well as online and via specialist brokers.
On the life assurance front, Aviva bought rival Friends Life in 2015, a £5.6 billion deal, which consolidated the group's position in the savings and pensions sector.
The company has made several smaller acquisitions since, including the purchase of other firms' pension liabilities. Specialists such as Aviva tend to manage these pension pots more efficiently.
Further deals are likely, not just in the UK but overseas as well.
Midas verdict: Aviva shares have fallen from 534p in January to 486.5p today, at which point they are a long-term buy. The dividend alone makes this stock appealing while the long-term growth prospects should provide further momentum.
Don't disagree with your points, but in defense of buybacks they make the ordinary dividend more affordable to maintain/increase. As this is a long term hold for me, I'm happy with a nice stable SP and chunky dividend to reinvest.
I listened to boss of Aviva for 2hrs on CNBC this morning and he made so much sense on a number of fronts. I like his comment of them using big data to already have most of the info and answers to any questions to base a quote or premiums and can reduce staff costs and it makes it cheaper to them by as much as 30%.
On my watch list because of their increasing yield of 4.4%
When Aviva is on the rise it usually starts around February.So its good to see it going up this early on.If we have the same continued rise as seen a few years back £6.50 is deffo not out of the question.........fair value is more like £7.50 and then 1 day onto my £9.20 prediction.
3 billion excess cash to be deployed in 2018 /2019
That's what Mark Wilson said today on CNBC.He went on to say he was looking at investing more in asia and possibly China.
I would imagination this will be finding its way back to shareholders via more rises in the divs (heres hoping there will be a special one,not like Mourhino).As for buybacks.well Aviva has not gone anywhere in the last 4 years so I would knock those on the head and return the cash to shareholders.
" THE FTSE THIS WEEK (FTSE:UKX) By normal standards, the market is approaching a level where we'd normally anticipate some trauma around the 7840 point region. But as the US markets continue to prove, conventional arguments tend founder in the ..."
"If markets were to sell off next year, it's difficult not to see lower levels
for Aviva... Just my take only, would be interested in any other views..."
Essential - Yes, as with most financial stocks - and particularly those with significant fund management operations - Aviva will be relatively highly correlated with the overall index.
But it remains a pretty big 'If' for me... people seem to worry about the absolute index level, which of course goes up over time, yet overall valuations for the UK market remain broadly in line with long-term average sustainable levels on most metrics, and outright "cheap" on some (eg. dividend yield). And it is a similar story with quite a few other major markets (eg. Continental Europe, Japan).
Moreover, relative equity valuations look outstandingly "cheap" against most other major asset classes (eg. bonds, cash... even property), based on historical levels... albeit we live in relatively strange times and 'normalisation' may be some way off still.
So when people say "equity markets are looking expensive" - and you hear it a lot - it doesn't really bear out. What they really mean (whether they know it or not!) is "the US market is looking expensive" - which it is, although less so than it seems prima facie, if you adjust for the extraordinary phenomenon (and phenomenal ratings) of the Apples, Amazons and Facebooks, for which there is little corresponding comparison in recent history and which now make up a very significant chunk of the US indices.
Yes, "corrections" are a periodic fact of market life and there will undoubtedly be another one along sooner or later - only a fool can say it definitely won't be next year. And if a broader equity correction is triggered by a major sell-off in the US - the most likely epicentre - then few markets will escape the shock waves, at least initially.
But all the evidence tells me that if we do get a sell-off, the best advice as to what to do is the usual advice - buy it, and buy it big! And Aviva will likely be as good a stock as any to buy big, given that key valuation metrics (prospective yield above 5%, P/E below 10x) are already notably undemanding at £5, "stuck" or not...
In fairness Keith the charges tend to be very low for AE schemes (typically around 0.5% pa) and when you couple this with small average pot sizes isnt really the recipe for easy profits.
With regard my public sector remark, it really does just boil down to the huge difference between a defined benefit and AE scheme. The biggest clue as to the expense and quality of final salary schemes is the fact that so few (if any) private sector companies now offer them to new employees.
Personally I agree you need to save for your retirement as early as possible I started at 17 in the hope of retiring when I'm 50 haha I was 17 at the time
I don't think workplace pensions are that good due to the charges (could be wrong) but on that note good for those that provide the service, hence my question for Aviva.
Finding a good, well paid job in the public sector sounds a good plan but then no job is safe, unless going to be a Dentist or Doctor..but a decade of studying takes the shine off and for those not wanting to go to Uni.....
Aviva do offer AE pensions, but from what I've seen they don't seem to be that commonly used. In a way I'm not too sure how profitable AE pensions will become due to the low average pot sizes, but only time will tell.
With regard to workplace pensions in general, it probably makes sense to start saving as early as possible, because it has become hideously expensive to buy an inflation linked annuity at retirement. I work within the financial services industry and my answer to anyone wondering how best to achieve a secure future retirement is quite simple....................get a job in the public sector.
I have two teenage daughters and despite my valiant attempts I don't think they quite grasp the huge difference between a defined benefit and money purchase pension. To be fair to them its not exactly sexy, but a day will come when it all becomes much more relevant.
Insurance giant Aviva is facing open-ended losses that may in theory run to billions of pounds thanks to a bizarre investment product sold in the pre-internet 1980s that lets its owners profit from moves in financial markets after they have happened.
It is pitting the FTSE 100 firm against a 28-year-old Frenchman, Max-Herve George, who lives in the Swiss ski resort of Gstaad.
He says Aviva which looks after pensions for millions of Britons and has many UK private investors could owe him more than a billion euros over his lifetime.
To read the rest follow the link below
Shabby 2 sox "perrenial disappointment" lol,I can think of other words to describe av but iii would not let me post them..
However in all the 15 years I have been in and out of this stock,it has always provided me with general income (mostly divs). In that time my investing money has gone nearly 20 fold up,so cannot be to negative..............
roll on 8th March,should see the div increase around 10% and maybe we can break and stay above £5.50
Apart from Brexit concerns why would AV share price fluctuate three times by up to 2% in a month? It now seems to be heading for the bottom of the dip at around 490p - 500p
I have added recently on consensus that AV is now a buy; hold mainly for the dividend but expect some capital growth but on the latter AV is a perrenial disappointment.
I've added another decent chunk to my holding. As I surmised, short term earnings forecasts have been lowered a little, which has caused the price to drift down a bit, but in my view these shares are undervalued by quite a bit.....
Aviva: light at the end of the tunnel, says Deutsche Bank
Insurer Aviva (AV) has completed its heavy lifting, according to Deutsche Bank, and there are increased payouts to come.
Analyst Oliver Steel retained his buy recommendation and increased his target price from 585p to 600p. The shares edged 1.6p higher to 508.1p yesterday.
After years of heavy lifting, there is light at the end of the tunnel, he said. A commitment to repaying at least £900 million of debt next year reduces leverage to near the peer group average 31% by 2019.
In turn, the normalisation of the leverage ratio and improved quality of earnings is enabling an uplift to the payout ratio to 55-60% by 2020, implying 10% per annum growth over 2018-2020 from a yield base that is already 0.7% above the sector.
He added that the prospects of above mid-single digit growth could see a re-rating of the shares over time from a price/earnings [ratio] 23% below the sector average.
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.