A Complete Guide to Blue-Chip Stocks

How would you like to find great stocks that produce great dividends and earn you more money while investing in the market’s most stable companies? This may sound farfetched, but with blue-chip stocks, this is entirely possible.

Blue-chip stocks are precisely what they sound like: large companies that tend to be quite popular and produce consistent gains year after year. While these types of companies don’t get as much attention as some of the more popular stocks, they are still around for a reason.

What Are Blue-Chip Stocks?

As mentioned, blue-chip stocks are defined as a large, well-established company that continually grows and has an excellent reputation. They are generally one of the top three companies in their industry and have a significant market share.

Blue chips usually pay good dividends and do not fluctuate much in price. If you were to purchase blue-chip stocks with your money, you could expect them to return gains over time. If you want to read more about stocks go to the official website Saxo.

History Of Blue Chip Stocks

The origins of blue-chip stocks are attributed to the casino industry. In the early 1900s, casinos would put poker chips in various colours and denominations based on their value. The lower denomination chips were blue, and the higher denomination chips were often red.

These colours helped distinguish the difference between low-risk investments and higher-risk investments. While history explains these terms in an economic context, they’ve been used so frequently that many consider them “normal” terminology for investment purposes.

Benefits And Downfalls Of Buying Blue-Chip Stocks

Here are some of the key benefits of investing in blue-chip stocks:

  • You can expect them to produce high returns on your investments.
  • They are excellent for people looking for some security in their portfolios.
  • Blue chips create earnings growth over time.

As for the downfalls of buying blue-chip stocks:

  • They are not very liquid because they cannot be traded easily.

Which Blue-Chip Stocks To Buy

Most investors buy smaller shares of blue-chip stocks because they can afford them. Unlike with penny stocks, where most value rises with volume, the value of blue-chip stocks will rise if there is high demand for it. This is likely when people decide they need to buy more of the company’s products or services.

Blue-chip companies include:

  • Apple (AAPL)
  • Microsoft (MSFT)
  • Berkshire Hathaway (BRK.A, BRK.B)
  • Nike (NKE)
  • Johnson and Johnson (JNJ)
  • Coca-Cola (KO)
  • Visa (V)

Why Are Blue-Chip Stocks Great

Blue-chip stocks are an ideal investment for anyone looking to start their stock portfolio. They grow steadily over time, and if you buy them on the dips, you will be able to benefit from this growth. They are symbols of safety that act as a store of value. Blue-chip stocks are excellent investments for people who want some security in their portfolios. Generally, investing in blue-chip stocks is a safe bet.

One of the main characteristics that define blue chips is their large market share and long history as one of the best companies in their industry. Blue-chip stocks are some of the most well-known and oldest companies worldwide and thus have an exceptional reputation to match. If you find yourself looking for a company with longevity and stability, look no further than blue-chip stocks.

While they may not be as flashy as penny stocks, blue-chip stocks can be just as lucrative if purchased under the right circumstances. They would make ideal investments for someone who knows what they’re doing or has experience picking suitable investments. It takes quite a bit to invest in these stocks successfully, so be careful when choosing your stocks.

Where To Buy Blue-Chip Stocks

You can buy blue-chip stocks in a variety of different places. You could choose to purchase them from the company directly, through your broker, or your bank. If you decide to go with any of these different options, you should probably do it during open hours to get the best possible price when purchasing them. Some examples of trading places include:

  • The New York Stock Exchange (NYSE)
  • London Stock Exchange (LSE)

Bet On Your Blue-Chip Stocks

So, as you can see, blue-chip stocks are fantastic for those looking to invest long term. They are safe and reliable and almost always result in a good return.