While the volatility may not be over, I'm feeling optimistic that the S&P/ASX 200 Index (ASX: XJO) is now over the worst of it.
As a result, I think now is a good time for investors to identify the shares they would like to add to their portfolio when the bear market ends.
If you're looking for blue chip shares, then I think the three listed below would be worth considering:
BHP Group Ltd (ASX: BHP)
I think BHP would be a good option for investors that are looking for exposure to the resources sector. I believe the company is well-positioned to deliver bumper free cash flows again in FY 2020 thanks to its low cost operations and robust iron ore prices. And given the strength of its balance sheet, I suspect that the majority of its free cash flow will be returned to shareholders in the form of dividends and share buybacks.
Coles Group Ltd (ASX: COL)
One of my favourite blue chip shares is Coles. I think it is a top option for investors due to its strong market position, solid growth prospects, and its defensive qualities. The latter has been on display for all to see during the coronavirus pandemic. The supermarket operator is one of only a handful of companies benefiting from the current market conditions. Outside this, I believe its cost cutting plans, focus on automation, and strong track record of increasing like for like sales has positioned it for growth over the next decade.
Telstra Corporation Ltd (ASX: TLS)
A final blue chip share to consider is Telstra. As with Coles, its defensive qualities have been on display during the coronavirus pandemic. I think this, its attractive valuation, and positive outlook make it a blue chip to buy. The latter is thanks to its T22 strategy, the launch of 5G, and improving industry conditions. Another positive is that its shares offer a generous ~5% yield in this low interest rate environment.
