Anybody fancy a guess at the place the FTSE 100 would possibly end in 2024? It’s solely a little bit of a sport, however a variety of us wish to play alongside. I do know I do.

Wanting spherical at what the specialists suppose, I’m seeing a good bit extra uncertainty this yr than lately.

However I believe it may well assist to have a look at predictions, and take into consideration what they may suggest.

Too exact

I see a few websites on the market providing month-by-month predictions, all the way down to the final digit, going years into the longer term. I believe that’s simply nonsense.

It appears a bit like beginning a food regimen plan, and setting month-to-month weight reduction targets all the way down to the milligram.

There’s a really wide selection of predicitions on the market. Most are fairly conservative at this stage. And I believe that’s smart, contemplating the opposing pulls between financial fears and low share valuations.

However a few of them are fairly optimistic.

The bull case

I’m not seeing numerous folks pumping up the probabilities of the Footsie reaching 10,000 factors in 2024. In earlier years, that was extra frequent. However a pointy dose of 2023 appears to have damped hopes like that.

Essentially the most upbeat I discover is for round 9,000 factors. What would possibly that imply?

It could be a 20% acquire. That feels like loads, however the index is on an price-to-earnings (P/E) ratio of solely 11 now.

A 20% rise would take it to 13.2, which remains to be under the long-term common. And it’s in a yr that would see dividends come near the all-time report set in 2018.

Rising shares

One factor in opposition to such a soar although, is that I see fairly just a few recovered shares as being absolutely valued now.

So an total 20% acquire would wish the extra undervalued ones to climb by greater than 20%. I do suppose some, like Barclays (with a P/E below 5 for 2024), would possibly deserve a lift like that and extra.

However I’m not seeing a one-fifth acquire for the index, particularly as some commentators count on shares to drop within the first half of the yr.

No change?

On the different finish of the size, some suppose the inventory market will probably be flat in 2024, and even fall. If we get the financial recession that some predict, it may occur.

A flat outcome wouldn’t be so dangerous. However I simply see it as too gloomy.

Dealer forecasts have been scaled again, however analysts nonetheless count on earnings and dividends to develop steadily within the subsequent few years. And so they may very quickly be setting new all-time information.

Consensus

The final consensus appears to be a FTSE 100 of between 7,500 and eight,000 factors by the tip of 2024.

In order that’s something between no transfer in any respect, and a 6.7% rise. Based mostly on the short-term uncertainty, I believe we’d effectively find yourself someplace in that vary.

However I’d say it drastically underestimates the long-term worth of UK shares proper now.

I reckon 2024 could possibly be one other patrons’ paradise.