Despite all the fear and uncertainty surrounding Greece and China, the Australian sharemarket has still managed to post a 2.1% gain over the last week, including a 1.8% jump today.
Commonwealth Bank of Australia (ASX: CBA) has also managed to edge higher and even recorded its highest price in roughly two months today. The stock rose by as much as 2% earlier in the session, hitting a high of $88 before slipping back to $87.50.
As a result of the low interest rate environment, many investors remain attracted to Commonwealth Bank due to its solid, fully franked dividend. While it is expected to pay a total dividend of $4.21 per share for the 2015 financial year, that gives it a 4.8% fully franked dividend yield at its current price of $87.50 (or 6.9% when grossed up).
In my opinion however, investors should steer clear of Commonwealth Bank and each of its rivals. The bank remains an expensive investment prospect while its earnings (and dividends) could come under enormous pressure in the months and years ahead. Although it could generate gains in the near term, there are far better long-term prospects for you to consider instead.
