Investors have already been thrown their fair share of curveballs in 2016.

First, there was China.

Investors around the world panicked at the thought of a potential “hard landing” for the world’s second biggest economy, which is now growing at its slowest pace in a quarter of a century.

The situation was exacerbated by a bout of volatility on the country’s stock market, which has since been nicknamed the “crazy casino”.

The oil market has also taken investors on a roller coaster ride.

Heavy losses in 2015 extended into the new year as the resource plunged to around US$27 a barrel. It hasn’t traded at those levels in nearly 13 years.

Although it’s been a bumpy ride, it has since surged to almost US$33 a barrel, leading some economists to predict a major oil “bull market” in 2016 and 2017.

Whether or not that actually happens is another thing…

The fact is, the oil market is overflowing with supplies right now, with some estimates suggesting more than one million barrels per day in excess capacity.

There has been some talk of a deal being struck between OPEC and non-OPEC producers to curb supply, but an agreement could take some time yet…

After all, it’s really a big game of Chicken right now, where no one wants to be the first to give up their share of the market.

The end of an era for Aussie blue chip shares

The fears regarding China and the crashing oil market have spread far and wide, panicking investors around the world into a selling frenzy.

Unfortunately, Australia’s own share market has been much the same. The S&P/ASX 200 (ASX: XJO) has fallen 6.6% year-to-date while it’s down nearly 18% since peaking in 2015.

In times of uncertainty, investors have typically turned to the blue chips as a source of comfort.

These are some of Australia’s biggest and most reputable companies. They’re the household names most investors are confident will still be around – bigger and stronger – in 10-years’ time.

But it hasn’t gone that way so far in 2016…

Sure, the miners and energy companies have been hit hard, as one might expect.

BHP Billiton Limited (ASX: BHP), for instance, has plunged 16% since the beginning of the year and is trading around $15 a share, while some forecasts suggest it could drop to $10 – or lower – before it finds a floor.

Investors are also weighing up the likelihood that the miner will be forced to scrap its ‘progressive dividend’ policy, while a major capital raising is possible.

The warning signs have been on the wall for a long time for the commodities market. But for most investors, the signs weren’t so clear cut when it came to the nation’s other blue chip shares.

Not so for Bruce Jackson, General Manager of The Motley Fool Australia.

In November 2015, Bruce warned investors of “The end of an era for Aussie blue chip shares.”

Since then, shares of Australia and New Zealand Banking Group (ASX: ANZ) have fallen nearly 9%, while they’re down 36% since peaking in 2015.

Further falls are possible after the bank’s new CEO, Shayne Elliott, flagged a potential cut to the group’s full-year dividend.

Analysts at Morgan Stanley were already predicting a cut, possibly as much as 14%, partially due to a rise in loan losses.

But ANZ isn’t the only bank susceptible to a decline…

Each of the other major banks are also at risk of slowing earnings growth with bad debt charges tipped to rise, together with the possibility of further capital raisings this year.

Outside the banks, Woolworths Limited (ASX: WOW) has also dominated the headlines.

Investors recently applauded its decision to offload its failed Masters business.

While the move will help stem the losses in the short-term however, it’s unclear whether or not long-term investors will ultimately benefit.

Then there’s the fact that it’s still without a CEO to replace the outgoing Grant O’Brien… Its Big W business is still a mess… And its supermarkets are still losing market share to Coles and Aldi

These blue chip companies account for a large portion of the overall ASX 200, and thus make up big positions in most “index hugging” funds.

They also dominate the portfolios of many unsuspecting ‘mum and dad’ investors, and could threaten to impact their long-term returns as a result.

Finding Tomorrow’s Winners

Now, I’m not saying that you should eliminate your exposure to Australia’s blue chips.

As an example, I still think Wesfarmers Ltd (ASX: WES) represents good value.

Telstra Corporation Ltd’s (ASX: TLS) 5.5% fully franked dividend yield looks pretty compelling in this low interest rate environment as well.

But to find tomorrow’s winners, investors should open themselves up to looking outside the usual suspects.

And that’s where Scott Phillips comes in.

Scott is the lead advisor for Motley Fool Share Advisor, a service which is handily outperforming its benchmark, the All Ordinaries (ASX: XAO), since its time of inception.

When new members join the service, one of the first things they will notice is the lack of miners or banks on the scorecard.

Not BHP. Not Rio Tinto Limited (ASX: RIO). Not even Australia’s biggest company by market value, Commonwealth Bank of Australia (ASX: CBA).

That’s not to say they’ll never make it to the scorecard. But right now, there are simply better opportunities that Scott believes investors can profit from over the long-term.

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