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Is it time to buy National Australia Bank Ltd, Westpac Banking Corp and ANZ Banking Group shares?

I hope you took my advice earlier this week and started purchasing shares of quality Australian businesses…

BanksSource: 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.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Owen Raskiewicz has no position in any stocks mentioned.

Owen welcomes your feedback on Google+ (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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