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ASX 200 charges past 5,800 points: Is the time right to buy?

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) managed to surpass 5,800 points this morning after recording another impressive 0.8% gain.

Indeed, the main bourse is yet to end a session in the red so far in 2017. It rose in each of its four sessions last week (the market was closed for New Year’s on Monday) and is now sitting 2.4% higher, year-to-date.

Its performance so far this year is in stark contrast to how it performed at the beginning of 2016 in which the ASX saw the value of its shares sink more than $100 billion by 11 January.

Source: Google Finance

Source: Google Finance

The banks have done much of the heavy lifting to get the ASX to where it is today.

Commonwealth Bank of Australia (ASX: CBA), for instance, has gained 3% year-to-date while its three major rivals, being Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC), have all risen more than 3.6%.

Of course, it won’t always be smooth sailing. Markets never rise in a straight line, so the ASX 200 is by no means guaranteed to continue rising this week, month or even this year.

However, with the market now sitting at its highest point since mid-2015, it does appear that optimism is returning to the markets. That does not mean you should invest blindly, or simply buy the biggest stocks (such as the banks or miners), but it should make you think about where you want to invest your cash.

Buying shares in high-quality businesses could be a great idea, provided you’re in it for the long haul.

5 stocks under $5

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*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. 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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