Just months ago, phrases such as "out of luck" and "recession" were being thrown around as predictions for the Australian sharemarket in 2015. Indeed, some of the country's most well-known fund managers were predicting a sharp downturn for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), suggesting the benchmark index would tumble as a result of a weaker economy.
Boy were they wrong…
In fact, the ASX 200 has experienced a remarkable 11-day winning streak, over which time it has surged 9.5% higher. It closed at 5,811 points on Thursday, its highest close since May 2008, driven mostly by the Reserve Bank's surprise interest rate cut on Tuesday.
As would be expected under the circumstances, the market's high-yield dividend stocks have led the charge. All four major banks finished at either record or multi-year highs on Thursday while Telstra Corporation Ltd (ASX: TLS) is also trading within one percent of a 14-year high.
A sharp rebound in the oil price has also provided a basis for stronger returns. Although the commodity remains highly volatile, its price has risen roughly 20% over the last week following an eight-month long plunge. Companies such as BHP Billiton Limited (ASX: BHP), Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) have all benefited handsomely.
Time in the market
The market's recent strength is a perfect example of why time in the market is so much more rewarding than timing the market. Investors who listened to those bearish forecasts late last year have missed out on some enormous profits and one of the sharpest rallies in recent memory.
However, it's by no means too late to get involved. With another two interest rate cuts tipped for the remainder of the year, the sharemarket could have a lot further to climb before it's done. And, you guessed it, I think it'll be high-yield dividend stocks that will continue to benefit.
One company I believe presents as a very reasonable buy today is debt collection group Collection House Limited (ASX: CLH). The stock has a strong track record for growing earnings and revenue while it has also consistently increased its dividend payments. While I expect earnings will continue to grow this year, the stock is also tipped to yield 4.1%, fully franked.
JB Hi-Fi Limited (ASX: JBH) and Super Retail Group Ltd (ASX: SUL) are also posing as good investment prospects. While the pair offer fully franked yields of 4.8% and 4.7% respectively, they should also benefit as consumer confidence improves, lifting their sales.
Despite how promising these three companies are, there's one other stock which could be an even greater buy today.
