The FTSE 100 hits 9-month highs! But I think these UK shares are still too cheap to miss

The FTSE 100 has enjoyed a merry time in recent weeks. It’s up 17% since the beginning of November as significant breakthroughs on a Covid-19 vaccine have boosted investor confidence. And the blue-chip UK share index kept rising in Friday trading as well. In fact the FTSE 100 just hit its highest level since early March around 6,550 points .

It’s too early in the Covid-19 fightback to claim that the new bull market is here. There are still numerous reasons, coronavirus-related and otherwise, why UK share prices could turn lower again. Signs that a Brexit deal is hitting the buffers is one reason why British stocks might run out of puff.

Buying UK shares despite the uncertainty

The possibility of fresh share price volatility isn’t affecting my own investing strategy, though. I buy UK shares for the long haul. That is, I purchase them with a view to holding them for at least a decade. Over this sort of time horizon the impact of temporary share price choppiness on eventual returns is minimal.

This is why I’ve continued to invest in my Stocks and Shares ISA in 2020 despite the uncertain economic outlook. I don’t need to be worried by wild swings in investor confidence and its impact on UK share prices. I also know that the global economy will bounce back strongly and pull stock markets northwards with them. History shows us time and again that shares recover after economic, political and social crises. I can afford to be patient and not be anxious for a strong economic recovery in 2021.

2 cheap FTSE 100 shares on my watchlist

I’ve bought shares in Coca-Cola HBC in recent weeks. And there are plenty more FTSE 100 stocks I’m thinking of adding to my ISA in the not-too-distant future. Indeed, despite the recent stock market rally a large number of Footsie-quoted shares still appear to be too cheap to miss.

Here are a couple of blue-chip UK shares on my radar today:

• Associated British Foods is likely to experience a terrific uplift in trading in 2021 as its Primark stores are reopened and tough economic conditions boost demand for its budget clothes. The business has described sales as “phenomenal” since it reopened scores of stores this week. I’d buy it today and hold it for years as its global store expansion scheme should deliver terrific shareholder profits. Today ABF trades on a rock-bottom forward price-to-earnings (PEG) ratio of 0.5.
• The BAE Systems share price also looks mighty attractive right now. The defence contractor trades on a price-to-earnings (P/E) ratio of 10 times. It boasts a mighty 5% dividend yield too. Not only can this FTSE 100 firm expect rising defence budgets in the West to keep driving profits over the next decade. Its position as a top-tier arms supplier should keep the business rolling in too. These qualities helped BAE Systems secure a new £2.4bn munitions contract with the Ministry of Defence just this week.