Yesterday's session was momentous for the S&P/ASX 200 Index (ASX: XJO) and ASX shares. The ASX 200 managed to hit yet another all-time record high, the latest in a string of new high watermarks that the Australian share market has seen in 2024.
Yep, the ASX 200 closed at 8,318.4 points yesterday, a new record closing high. That was after the index hit an intra-day high of 8,331.7 points during trading hours – which is the new all-time record high for the index. So happy days all around for ASX investors.
Even if you're not invested in ASX shares directly, chances are your wealth has benefitted from these developments. That's thanks to the impact that a rising share market has on our pensions and superannuation accounts.
If you already own ASX shares, no doubt you'll be celebrating these new records. But if you don't, you might be wondering whether the ship has sailed. Whether it's worth investing in ASX shares when they are at these all-time highs.
Let's dig into that question today.
How to invest with the ASX 200 at record highs
Well, the first thing to note is that yesterday's record highs shouldn't put you off investing if you only use index funds, particularly if you employ a dollar-cost averaging strategy. It might seem prudent to dial your investments down when prices are high, but this is a form of 'timing the market,' which rarely works out for most investors.
Additionally, the markets historically have gone up far more than they have gone down (that's why we're at a record high this week). With that in mind, it doesn't make logical sense to hold off buying.
For all any one of us knows, the markets could spend the next year continuing to surge. If that's the case, you could end up spending a lot of time waiting for the markets to cool down, thus depriving yourself of additional gains.
But what about those investors who prefer to pick individual stocks?
Well, obviously, there will be a few ASX shares that aren't exactly offering the best value for money right now. But the rising tide of the markets doesn't lift all boats.
Take the ASX 200's largest stock, mining giant BHP Group Ltd (ASX: BHP). Despite the significant gains of the index in 2024, the BHP share price remains down by around 13%.
It's a similar story with another commodities giant, oil heavyweight Woodside Energy Group Ltd (ASX: WDS). It's currently nursing a 21.2% loss for the year so far.
Meanwhile, Woolworths Group Ltd (ASX: WOW) shares have fallen more than 12% over 2024, while Telstra Group Ltd (ASX: TLS) has declined by 2% this year.
Foolish takeaway
Now obviously, just because a company has gone backwards doesn't mean it's automatically a bargain buy. But I think these examples demonstrate that today's high markets are still a fertile hunting ground for value-minded investors.
So don't get put off your investing just because the ASX 200 is at record highs this week. You never know what kinds of deals are waiting under the radar.
