Blue Chips Now Value Stocks

Sometimes what you're looking for is hidden in plain sight. And if what you're looking for are some long-term conservative investments at good value, that's the case right now.

While everyone else is off hunting emerging-market equities and high-yield bonds, take a look at something really simple and obvious:

Blue chip U.S. equities.

Yep, the companies everyone knows, like Johnson & Johnson(JNJ), Procter & Gamble(PG), IBM(IBM), Intel(INTC) and Citigroup(C).

These are the world's biggest, best run, and most respected companies. They're global. They have underperformed the rest of the stock market, here and abroad, for years.

And that means today they are looking like pretty reasonable values -- especially compared to almost everything else.

As Ron Muhlenkamp of the (MUHLX) Muhlenkamp Fund put it, "Right now, the Chevvies of the stock market and Cadillacs are all selling for the same price. Everything's about 17 times earnings." And if you can buy great stocks for the same price as mediocre stocks, why would you buy the mediocre ones?

Even Jeremy Grantham, who is deeply bearish, seems to be taking the same view. Grantham, the chairman of Grantham, Mayo and Van Otterloo, just posted his latest investment forecasts for different asset classes. On a medium-to-long time frame, nothing looks compelling right now, he says. The best, or the least bad asset class? "High quality U.S. equities."