Motley Fool : Make Your Child a Millionaire

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But I want to quote another of my all-time favourite investors, Sir John Templeton. He made his fortune going against the crowds. I've been a Fool for over a decade, and am proud to currently call myself the Editor in Chief of TMF UK. I follow Foolish investing principles, and buy shares in quality companies throughout both bull and bear markets! Foolish Freelancers It’s based on the US. But what if I buy Lloyds Banking Group on a price-to-earnings (P/E) ratio of six, and it falls to 4.2?

The whole FTSE 100 looks rough right now, but the banks are among the worst affected. That doesn’t surprise me, as the latest threat is all about finance. Financial crunch Financials like investment managers and insurance firms are on big yields due to those share price falls. That also doesn’t surprise me. How long might that take? I’ve no idea, but I suspect longer than a lot of people think. Still, I rate the sector as a long-term cash cow. And I think the short-term risk is worth taking.But for those with a positive view of housebuilding for the long term, I think this could be a great choice right now. Investment trust The dividend yield suddenly looks better now too. Forecasts vary, but they indicate around 5% for 2023. And that’s in a tough year. Earnings are predicted to keep growing. And dividends are expected to reach 6.5% by 2025.

Alan is a freelance writer who began writing for The Motley Fool in the late 1990s. He has been a private investor for more 30 years, and has explored a number of strategies, settling on high-yielding blue-chip shares. They might be wrong, the dividend might falter, and the share price might fall. But just think of the passive income I could build if I can snag yields like these, and keep them coming. What if? Price-to-earnings (P/E) ratios are low, with Aviva at 7.5 and Legal and General on 8.6. Among the banks, Lloyds Banking Group is on a multiple of 6.2, while Barclays‘ is just 5.1. But I don’t see any real threat to its long-term potential here. In fact, with the shares now on a price-to-earnings ( P/E) ratio of under five, I think they’re a steal. Reduce costs I really don’t see it staying at 10% for 20 years. But I think it shows the value of any cash we might invest now, while yields are so high. UnceraintyAnd we also see Legal and General among the top 10 for dividend yields, with a forecast of 8.7%. Aviva is there too, on 8.0%. Both would be well covered by earnings. I mean, the FTSE 100 price-to-earnings ( P/E) ratio is only about 10.5 (depending on who we ask). That’s a fair bit below its long-term average of around 14 to 15. Still, Lloyds did report a 6% rise in other income, which it said is a sign of continued recovery. But it’s seeing increases in competition for savers’ cash too. Deposits down It’s all part of CEO Tufan Erginbilgic’s plans to “ build a high-performing, competitive, resilient and growing Rolls-Royce.”

BT would also have paid me five years of dividends. And they haven’t been bad at all. In fact, the forecast 6.5% for this year puts it in the FTSE 100 top 20. I’ve been buying investment trusts for years. And one of the key things I keep my eye on is the premium, or the discount. What are those, you might ask? So what’s the investor’s biggest enemy? I’d say there are two — short-term focus, and emotion. They’re two sides of the same thing, really.The world might be turning from oil and gas. But Shell‘s P/E is under nine, with BP‘s at only six. Dividend yields are only around 4% to 4.5%, but there’s growth on the cards. Perfect buy time? He said: “ It takes patience, discipline and courage to follow the contrarian route to investment success. To buy when others are despondently selling, to sell when others are avidly buying.”