Since the global financial crisis of 2007-09 ended in March 2009, the US stock market has enjoyed an almost unstoppable run. Meanwhile, as I’ve said repeatedly, the UK’s FTSE 100 index looks too cheap and deserves its day in the sun. And guess what’s come to pass in recent days?

The skyrocketing S&P 500

On 6 March 2009, the S&P 500 index hit 666 points — the biblical ‘number of the beast’. I remember this milestone clearly, as investors worldwide were in absolute agony. After all, the index had peaked at 1,565.15 on 9 October 2007, before collapsing by 57.4% — its biggest drawdown since World War II.

Back then, I was thrilled at the possibility of buying stocks at knockdown prices. My family piled our cash into US and UK equities that spring, making life-changing returns over the next 16 years. Currently, the main US market index stands at 5,534.54 points, up a staggering 631% from its 2009 low. Wow.

Nevertheless, since early February, I have repeatedly warned that US stocks had risen too far since the US presidential election of 5 November. It turns out I was right, as the S&P 500 and tech-heavy Nasdaq Composite indexes have since lost of all their post-election gains.

From Trump bump to Trump slump

The S&P 500 is now 10% below its 19 February high of 6,147.43, leaving it no higher than it closed on 3 July 2024. Meanwhile, the Nasdaq Composite stands at 17,351.59 points, having dived 14.1% from its record high of 16 December 2024.

Now for some surprising news: for the first time in years, the FTSE 100 is beating both of these US counterparts. Over one year, the Footsie is up 9.8%, versus 7.3% for both the S&P 500 and the Nasdaq Composite.

Furthermore, the icing on the cake for UK shareholders is that the FTSE 100’s dividend yield is 3.5% a year. The yearly cash yields for the S&P 500 and Nasdaq Composite are 1.5% and 0.8%, respectively.

Possibly, other investors may be adopting my stance that UK shares are undervalued, both in historical and geographical terms. Finally, a triumph for value investing!

One cheap FTSE 100 share

As an old-school value and income investor, I’m a big cheerleader for cheap FTSE 100 stocks. For example, take Legal & General Group (LSE: LGEN), which aims to return around two-fifths of its market value to shareholders over the next three years.

Since 1836, Legal & General has grown to become a leading UK asset manager. Its three key divisions — asset management, institutional retirement, and retail — all had a decent 2024. Thus, the group raised its dividend by 5% to 21.36p a share. It also intends to buy back another £500m of its shares, on top of a previous buyback worth £1bn.

That said, managing around £1.1trn of financial assets leaves Legal & General heavily exposed to market movements. When share and bond prices dive, its profits can be hit hard, as happened in Covid-ravaged 2020. Even so, its rock-solid balance sheet allows the group’s shares to offer a whopping dividend yield of 8.9% a year. This is among the highest on offer from London-listed shares.

Over one year, the shares are down 1.8%, but over five years, they are up 24.8%. Hardly exciting numbers, but we intend hold onto this high-yielding stock for years!