WHAT ARE BLUE-CHIP STOCKS?

The concept of “blue chip” comes from the game of poker, where out of all the colors of the chips, a blue colored chip represents a chip of highest value.

Blue-chip stocks are essentially the stocks of those companies which have been in the market for a long time, have stability and a good track record in the market. They are the safe stocks who are the leaders in their specific industry and are often used as examples while talking about the specific industry. They mostly give dividends and have strong financials. However, there is no such criteria for a company to become a blue-chip stock. It is all about the market and the perception of the investors and the traders.

New investors often wonder that if blue-chip stocks have reliable financials and are mainly profitable, then why should we invest in any other stocks? It is the best strategy to invest in blue chip stocks only and enjoy a good return. However, an experienced investor and old trader in the market would not agree to this because there is no guarantee that the blue-chip stocks will always give good returns. It takes just one day for any company to go from riches to rags in a very short period of time and if we are heavily invested in these stocks, then all of our wealth may get drowned if such blue-chip companies shut down.

It is necessary to have the adequate knowledge, experience, expertise and guidance to know which stocks are worth investing and when. Trading is like just another business which has its ups and downs and is based solely on the businessman’s zeal and patience to run the business.

Stakeindia, the oldest stock market/ share market Institute in Nashik, Maharashtra is engaged in giving you this exact service along with a number of other financial services such as mutual funds, portfolio management, a high tech trading platform, investment guidance and much more. Get in touch with us at stakeindiainstitute@gmail.com to know more.