On Tuesday, the Fairfax Press reported that asset management firm Forager Funds believes investors could be pulling out of blue chip stocks at the worst possible time. In a blog post written by Forager Fund’s Chief Investment Officer, Steve Johnson, the fund believes the S&P/ASX 200 Index (ASX: XJO) heavyweights are underappreciated as a result of Australia’s recession-free 23 years.

Due to a torrid 12 months where commodity prices hit rock bottom, intense competition eroded supermarket margins and regulatory headwinds reduced bank profitability, some of Australia’s biggest stocks like BHP Billiton Limited (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA) and Woolworths Limited (ASX: WOW) slumped in the 2016 financial year.

According to the Fairfax Press, the fall in share price of Australia’s biggest stocks meant these market stalwarts collectively under performed the broader market  by the most since 1989. This indicates investors lost faith in these bellwethers and searched for higher growth.

Nevertheless, as Mr. Johnson notes, blue chip companies outshine when times are bad. Accordingly, here are two blue-chip stocks which investors should buy and hold forever.

CSL Limited (ASX: CSL)

CSL released a lacklustre set of full-year results on Wednesday morning, announcing that underlying net profit was 18% lower on the back of the acquisition of Novartis AG’s influenza vaccines business.

Nevertheless, the global blood and plasma products leader expects earnings to surge about 11% in 2017 after excluding the one-off costs associated with Novartis’ influenza vaccines business.

The market is seemingly nervous about CSL’s outlook, sending its shares over 6% lower in early trade (at the time of writing). However, given its industry-leading position in the blood and plasma market, alongside its uninterrupted growth trajectory, I believe CSL deserves a place in any blue-chip selection.

With the market punishing its shares for missed earnings expectations, today appears to be a good time to buy shares in this global leader.

Telstra Corporation Ltd (ASX: TLS)

Telstra’s share price has plateaued since its stellar climb between 2013 and 2015, as concerns grow over Australia’s leading telecommunications company’s ability to grow mobile users and maintain network quality.

Nonetheless, as Johnson rightly points out, people will always need telecommunication services in any economic cycle. This makes Telstra one of the best defensive stocks to own in my mind.

With its highly coveted dividend yielding an annualised 5.7% (or 8.1% after franking credits) at current prices, Telstra should be a core portfolio holding for any long-term investor.  

Foolish takeaway

A balanced portfolio should consist of speculative, growth and blue-chip holdings, irrespective of the economic cycle. Although the latter group is unlikely to deliver knockout capital growth, the stability of blue-chip shares will be useful in times of turmoil.

As such, investors should always be on the lookout to acquire top-quality companies at the right price. I believe CSL and Telstra fit the bill at current prices, making them both a buy today.

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Motley Fool contributor Rachit Dudhwala owns shares of Telstra Limited. 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.