From the beginning of the year, S&P 500 It is miserable by 2%. However, our own FTSE index 100 leading actions increased by 7% in the same period.

This may be surprising, considering how often we hear about the fact that the American market will reach firmly, while the London stock exchange is neglected. Indeed, this month fintech on the London Stock Exchange Wise He announced plans to transfer the main stock market offer to the other side of the pond.

So should I look for budget-friendly FTSE 100 shares for purchase? Or maybe now there may be the moment when I focus on S&P 500 wrestling?

The Great Britain market still looks attractive valued

There has been a gap in a valuation between New York and London for a long time.

Even after a growth observed in FTSE 100 in recent months, its average price ratio is about 13. Compared to the equivalent number for S&P 500–29-A, the London market may seem massively underrated in comparison.

In fact, things can be more refined. First, the indexes contain various actions. S&P 500 contains rapidly developing technological giants Nvidiawhich can attract more racial valuations than FTSE 100 components with weaker growth prospects.

Another thing to consider the investor is whether the valuation gap can be justified and balanced. London has less liquidity than New York, and its companies have long been weaker valuations than peers. As an investor, I like it: I facilitate me collect opportunities. But it helps remember that only because something looks underrated, does not necessarily mean that soon (or always) will be quite valued.

I stick to what I know

Warren Buffett always emphasizes the importance of investors sticking to what they understand. Putting money into something you don’t understand is not an investment, but just speculation.

As investors, we have a home advantage when it comes to rating companies. I can get easier to fall into Tesco Or J Sainsbury To feel business than equivalent S&P 500 Walmart Or Dollar general.

This does not mean that I never invest in American companies. After all, the information is currently widely available. But I think that an investor based in Great Britain can be easier to detect possibilities on his home market than foreign, without inserting more legs.

One participation in Great Britain I am excited

An example is JD Sport (LSE: JD). One of its key suppliers is Nike. The creator of the S&P 500 footwear had a hard time recently, and the price of the action dropped 36% in five years.

JD Sports felt the wave effect: his own price of action dropped by 40% in the same period.

In my opinion, the constant penniless demand for Nike shoes is a risk of revenues and profits for JD Sports.

But while trading eight times earnings, JD sports actions look underrated. Although it is a company on the London Stock Exchange, it has extensive activity in the USA and many other global markets. If the sale remains sturdy, I think the price of the shares may raise.

The business model is proven and highly profitable. He uses the benefits of the scale, while his sturdy brand and exclusive products facilitate distinguish him from competitors.