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After flying out of the traps in early 2026, the FTSE 100 has tanked round 8% in three weeks. But this simply makes what was an already low cost index even higher worth whereas rising dividend yields.
UK investor Jim Mellon actually sees numerous worth on supply. And he’s not wanting a bob or two after making a fortune on gold and oil.
So, which Footsie shares does he like now?
Two super trades
As a fast reminder, Mellon is a businessman and profitable personal investor. Those that listened to him practically a decade in the past and took motion would have made some huge cash. As a result of he was very publicly piling into gold and silver again then.
In 2017, he wrote: “I am absolutely convinced that gold and silver are necessary in the current [inflationary] environment.” After which a few years later, he instructed a fellow investor: “Investing in 2020 is going to be easy. All you need to do is own gold and silver.”
From $1,148 per ounce in early 2017, gold has skyrocketed over the previous few years. As I write, it’s above $4,650, even after falling greater than 10% lately. In the meantime, silver has greater than doubled up to now yr.
Supply: BullionByPost
By late 2025, nevertheless, Mellon had exited most of his gold and silver positions. And the sector he was bullish on was vitality on account of its cheapness and the necessity for big quantities of energy to assist the AI revolution.
In early January, he highlighted BP and Shell as oil shares he favored. Yr thus far, they’re up 32.3% and 25.3%, respectively. However he was additionally piling into all the pieces energy-related, from exchange-traded funds (ETFs) to abroad companies like Equinor (+65% in 2026).
What about now?
Naturally, Mellon doesn’t get each name proper (no person does). For instance, he has lengthy been bearish on US tech giants, which have executed brilliantly over the previous decade. And buyers in Agronomics, his meals expertise start-up car, haven’t executed nicely.
However, he will get extra proper than incorrect, and presently he’s bullish on the FTSE 100 on account of a “commodities supercycle“. That’s, a chronic interval of excessive costs for uncooked supplies on account of years of underinvestment.
Extra broadly, he’s bullish on low cost dividend shares throughout numerous sectors, together with BP, Shell, Rio Tinto, British Land, and Worldwide Consolidated Airways (AIG).
One other he likes, which I simply purchased lately, is Authorized & Basic (LSE:LGEN). Shares of the pensions and life insurance coverage stalwart are down virtually 13% up to now month, with the Iran battle and a return of inflation including vital danger to the British economic system.
Nonetheless, the principle attraction right here is the ultra-high-yield revenue on supply. As a result of after its current dip, Authorized & Basic’s ahead yield is 9.2%. Utilizing the forecast for FY27, the forward-looking yield rises to 9.4%.
Whereas payouts are by no means assured, administration has already earmarked over £5bn for shareholders between 2025 and 2027, together with a mammoth £1.2bn share buyback. Backed up by a robust stability sheet, the dividend seems to be very engaging to me.
Authorized & Basic has a trusted model and long-term progress alternatives in retirement options on account of a quickly ageing inhabitants. It’s one among quite a few FTSE 100 shares I believe are value taking a look at proper now.
