Over the last few weeks, ASX 200 shares have been on a tear, rising over 27% from the lows we saw back in March.
Accompanying this meteoric rise in the S&P/ASX 200 Index (ASX: XJO) has been a few new records – specifically some ASX shares making new, all-time highs.
Not 52-week highs, all-time highs.
It's strange to think this is happening during these uncertain times, but it is.
Afterpay Ltd (ASX: APT), for one, hit a new all-time high above $50 per share on Tuesday. The fact that it was only in March this company was trading at under $9 per share makes this even more remarkable.
Fortescue Metals Group Ltd (ASX: FMG) wasn't far behind, setting a new record of $14.13 per share last week.
Other ASX shares entering the record books recently include Pushpay Holdings Ltd (ASX: PPH), Evolution Mining Ltd (ASX: EVN) and Kogan.com Ltd (ASX: KGN).
Watching a share reach a new high is exciting – particularly if you already own it. But it can also be disheartening if you have a certain company on your watchlist.
But some ASX shares are seemingly at 'all-time highs' more often than they're not. As an investor who has been watching CSL Limited (ASX: CSL) for years, waiting for a 'buy-the-dip' opportunity, I can tell you from personal experience it can be frustrating.
So is it ever ok to buy an ASX share when it's trading at all-time highs?
Should you ever buy ASX shares at all-time highs?
Normally, I think buying shares when they are at all-time highs is a bad idea. Most ASX shares fluctuate in the eyes of the market, and thus buying opportunities often emerge sooner or later. This is particularly true for ASX resources shares and other highly cyclical companies.
But there are exceptions to this rule. After all, there was a time when Afterpay was at 'all-time highs' at $12 per share. Or when CSL hit $200 per share and everyone called it 'overvalued'. Today these prices seem like bargains – but they certainly didn't at the time.
So if you have found a company that's growing fast, and you can see it continuing to grow well into the future, then perhaps an investment at all-time high prices is justified. But it will probably only turn out well if you have a long-term mindset. Furthermore, you really have to know the company back-to-front in order for your bullish outlook pay off.
