I hope you took my advice earlier this week and started purchasing shares of quality Australian businesses…
Source: Google Finance
….because since Monday, the ASX has bounced back in spectacular fashion.
In fact, despite posting its worst one-day loss since the Global Financial Crisis, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) will likely close the week up 1.1%!
Leading the charge back towards the psychological ASX-6000 level are shares in three of the big four banks. Namely, National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) which are up 7.4%, 8% and 8%, respectively this week.
Westpac, as we reported earlier this week, dropped as much as 6% in one day during the market's most recent bout of irrationality.
But with bank stocks boasting fully franked dividend yields greater than 5%, and reserve bank interest rates at just 2%, is it really a surprise that these bank stocks have rebounded?
Hardly.
Is it time to buy Westpac, ANZ and NAB shares?
Following the huge selloff in Australian stocks, many investors are now likely running the ruler over popular dividend stocks such as the banks.
However, an investment in any of the major banks doesn't come cheap, and at today's prices I believe they're best left on your watchlist until we witness another meaningful pullback in share price.
