The S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has rallied strongly since the depths of the GFC, returning roughly 80% in that time – and that's not even including dividends. Currently sitting at 5,511 points, it is just 0.8% below its six-and-a-half year high and just 8.2% below striking the 6,000 point level for the first time since January 2008.
Despite the local market's incredible performance however, it is still nothing compared to what the U.S. S&P 500 or Dow Jones Industrial Average have achieved in that time, having climbed an astonishing 194% and 161% respectively.
While it seems highly unlikely that the ASX 200 will be able to match these returns any time soon, it could well climb further than the anticipated 6,000 points. Perhaps it could even challenge 7,000 points! The ASX 200 has never hit such a high level, having peaked at around 6,800 points late in 2007.
While companies like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Woolworths Limited (ASX: WOW) and Telstra Corporation Ltd (ASX: TLS) have helped drive it to its current level, various other blue chips would also need to start pitching in to help it climb higher.
Rallies from stocks like BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO), National Australia Bank Ltd. (ASX: NAB) and Westfield Corp (ASX: WFD) would certainly help in the cause, given their heavy weighting in the index.
Although shares are nowhere near as cheap as they were in 2009, I believe there is still a way to go for the ASX 200 over the coming years. Investors choosing to remain on the sidelines waiting for a pullback may not get that opportunity and could miss out on some enormous gains in the meantime.
But whatever you do…
Don't miss this incredible ASX growth story…
