The FTSE 100 is now down in 2023. Should I be worried?

Four weeks ago have left FTSE 100 index looks a little bruised. After hitting record highs last month, the Footsie has fallen, especially in recent trades.

The index stopped

As I write, the blue-chip index is at 7,406.87 points, up 0.9% today. The highest peak on February 16, peaked at 8,047.06 points. Thus, it lost more than 640 points in four weeks, down 8% from the top.

This latest mini-meltdown comes after the fall of two tech-focused US banks. As investors rushed to withdraw cash from weaker US banks, this led to a classic ‘bank run’. This panic soon became contagion, with British bank stocks having to beat.

Here’s how the FTSE 100 has performed over the short and medium term:

One day	+0.9%
Five days	-6.0%
One month	-7.6%
Year to date	-0.5%
six months	+3.0%
A year	+1.6%
five years	+3.4%

The Footsie has had a strong start to the year, rising 8% above its December 30 close. But my table shows that the current index has recorded a small loss in 2023. (All figures do not include cash dividends.)

Last month, I warned that the London market might be going too far, too fast on a wave of investor euphoria. And after the party comes the obligatory hangover.

Am I worried about this latest market weakness? Not at all. Indeed, as a contrarian investor looking for value, I tend to buy more stocks when they are trading at a discount.

For me, these wise words from investment guru Warren Buffett ring true: “Whether we’re talking about socks or stocks, I like to buy quality merchandise when it’s marked down.”

Bank stocks took a beating

In the subject of undervalued shares, British bank shares have been battered hardest in the FTSE 100. As investors painfully remember the collapse of banks from the global financial crisis of 2007-09, they rushed to sell shares.

Here’s how the four leading UK banks have performed since the market peak on February 16:

Bank	Change from 02/16/23	Change a year	Change five years
Barclays	-18.0%	-18.3%	-31.7%
HSBC	-9.5%	+13.2%	-20.9%
Lloyds	-10.0%	-2.1%	-29.5%
NatWest	-13.8%	+10.4%	-6.2%

My table shows the decline in prices in the shares of the Big Four banks ranging from ten to almost five times. While two bank stocks have risen over the past 12 months, all four have fallen over the past five years. In short, it has been half a decade as a shareholder in British banks.

I see deep value in Footsie today

Like I said, I’m not worried about Footsie’s latest plunge. In fact, when the price falls, I am glad that I can buy a cheaper stock for the long term.

Today, I consider the FTSE 100 to be the lowest performing major market index, both historically and geographically. If I could buy the whole index at the current price (around £2.03trn), I’d be happy to eat it.

Finally, I usually pick up cheap stocks left, right and center. However, I am fully invested in equities. Also, I’m waiting for the 2023-24 tax year on April 6th before I get more money in the market!