These 10 blue chip stocks fell up to 12% last month: is now the time to buy?

A market rebound is sure to come soon.

Andrew Mudie

Andrew joined the growing team of Motley Fool freelance writers in mid-2013 following years of personal development as a passionate self-taught sharemarket investor. At the time, Andrew was an engineer by trade, writer by hobby, and an investing nerd by passion who spent far too many breaks reading, writing and learning. Andrew’s first investing lesson came with his first stock selection in 2011 when takeover rumours caused a spike and subsequent plunge in the share price of Woodside and then the 21% fall in the market through mid-2011. The next four years of investing saw Andrew dabble in a vast array of strategies until settling on his favourite investment methodology, which is closely aligned with that of the Motley Fool: Fundamentals-based long-term buy-and-hold of great companies at great prices.

Published October 20, 2014 5:01 am AEDT

The Australian sharemarket has fallen 6.84% between early September and Friday's close. The plunge was certainly expected to happen eventually and appears to have come as a result of the following factors:

The iron ore price has fallen (and remained) around the $80 mark;
Geopolitical tension is peaking, with issues in Asia, the Middle East and Russia making investors and governments' nervous;
The oil price has unexpectedly fallen to multi-year lows, despite some of the world's largest oil producers being involved in the fracas mentioned above;
Australian consumer confidence has remained stubbornly low;
The Australian property market bubble debate continues to rage;

As a result, essentially every sector on the Australian sharemarket has been hit, and hit hard. Small caps have underperformed, while some large caps have done even worse. Mining and energy stocks have been among the worst performers, however some strong companies' reliant on consumer interaction have fallen surprising amounts.

Here are 10 blue chips that have plunged over the last month.

Santos Ltd (ASX: STO), down 10.92%, Energy
REA Group Limited (ASX: REA), down 8.92%, Digital Classifieds
QBE Insurance Group Limited (ASX: QBE), down 8.83%, Insurance
Asciano Ltd (ASX: AIO), down 8.7%, Transport
Fortescue Metals Group Limited (ASX: FMG), down 8.51%, Mining
ResMed Inc. (CHESS) (ASX: RMD), down 8.19%, Health
AMP Limited (ASX: AMP), down 7.69%, Finance
SEEK Limited (ASX: SEK), down 7.54%, Digital Classifieds
Crown Resorts Ltd (ASX: CWN), down 6.61%, Gambling
Coca-Cola Amatil Limited (ASX: CCL), down 5.64%, Beverages

Importantly, investors should remember that selling now could be the worst possible moment. Many market commentators (including myself) believe that this dip will quickly reverse and that now represents a great opportunity to pick up quality companies at a discount.

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