Lloyds shares continue to fall. Are they a no-brainer buy now?

Lloyds Banking Group (LSE: LLOY) shares continue to disappoint.

They’re well down on the price I first bought at. I still see them as cheap, though. Perhaps even a no-brainer for a top-up buy.

But, can I really be right and all the big investors wrong? Would I be throwing good money after bad ?

Lloyds shares are up a bit in recent weeks. But it’s way too early to see that as the start of anything big. The 2023 trend is firmly down.

We’re looking at an 8% fall in the past 12 months, and a 27% slump over five years. But the resulting 5.9% dividend yield that’s now on the forecasts seems like a real ‘gimme’ to me.

I look at the share price chart, and I wonder why everyone else doesn’t see what I think I can see.

Bank risks

It’s easy to put it down to weak sentiment towards the bank sector. And that has to be part of it.

But let’s not overlook other things that might keep investors away from individual banks. They’re not all the same.

After the banking crisis, Lloyds withdrew from riskier international investment banking. And I thought that was wise.

Barclays stuck with it, though. And I think that risk is probably the reason Barclays shares are valued even lower than Lloyds.

Geography and politics

HSBC Holdings also looks cheap. But exposure to China and the East must be a big source of tension.

What about NatWest Group? It’s hard to shake off its Royal Bank of Scotland past, and that huge taxpayer bailout.

The government still owns 39% of NatWest. And the prospects of that much being dumped on the market some day is cause for unease.

Lloyds risk

Lloyds’ specific risk is the property market slump, triggered by soaring inflation and interest rates.

Moving its focus to UK domestic banking and becoming the UK’s biggest mortgage lender got rid of the international risk.

But it now looks a bit like jumping up off a lame horse just after it fell… and climbing on one with three legs.

So what do we do?

Diversify

Well, my investments are diversified. So whatever happens to Lloyds, it will only ever cover a fairly small portion of my retirement cash.

Lloyds itself has been pursuing plans to diversify its business too. And once we get out of the UK’s economic mess, I think the opportunities can only grow.

Still, I reckon a lot of investors will want to get the horror year of 2023 behind us before they’ll risk going for Lloyds shares.

Buy, sell, hold?

One way to avoid disappointment is to not expect much. And for the rest of the year, and possibly well into 2024, I really don’t.

But for the long term, Lloyds is at least a no-brainer hold for me. And it doesn’t tax my little grey cells too much to want to buy more.

Others, of course, should not rely on my brain. Particularly not with my track record on Lloyds. As always, they should do their own research and make their own mistakes… or better, smart decisions.