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Market hits a new 5-year high

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) defied poor local economic data to close at a new multi-year high yesterday at 5242.5 points after having climbed to as high as 5252.10 points during the day.

Positive signs emerging from both Asia as well as the US were enough to offset data released by the Australian Bureau of Statistics (ABS), which revealed that the number of employed people in August had fallen by 10,800 as compared to an expected 10,000 increase in jobs. Australia’s benchmark index followed the lead set by most Asian markets, which were able to push higher on reduced expectations of US military intervention in Syria as well as increasing signs of an economic recovery in China.

Leading the ASX 200 towards its new high were Macquarie Group (ASX: MQG) and Telstra (ASX: TLS), which were up 1.5% and 1.1%, respectively. Meanwhile, Flight Centre (ASX: FLT) rose 2.8% whilst News Corporation (ASX: NWS) was also up 3.8%.

The market will now await the US Federal Reserve’s policy meeting next week, where it is expected that a reduction in the scale of its bond-buying program will be announced. Although this could have a negative effect on stocks in the short term, the Fed has stated that it will only begin the tapering when it feels the economy is ready.

Foolish takeaway

Since late June, the market has climbed an incredible 13.2% from 4632 points to where it sits today. Investors who bought quality companies at bargain prices near the index’s low would likely have realised strong gains in the same time, whilst those who decided to wait for even lower entry points have simply watched the wide array of opportunities slip away.

When investing for the long term, investors should choose to ignore where they believe the market could go tomorrow or next week, and instead focus on the company’s value and ability to deliver market beating returns in the long run.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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