The 2020 pandemic hit many companies hard, while other companies took it as a chance to grow, seemingly unaffected by the state of the world around them. NVIDIA (NASDAQ:NVDA) came out as one of those thriving businesses and achieved gains of 122% in 2020. The company’s graphics processing units (GPUs) were present and needed for trends that accelerated exponentially due to the pandemic, boost...
What are Blue Chip Stocks?
Blue chip stocks are stocks of already-known, highly successful companies usually at the top of their industry. These firms have been put to the test time and time again, always coming out as a victor regardless of the circumstances.
Blue chip companies often make dividend payments that are continually growing. Blue chip stocks have been making stable returns in the long run, making them extremely popular amongst stock buyers, especially the conservative types.
To sum it up, a blue chip stock:
- A trustworthy industry leader.
- A history of success with consumers and shareholders.
- Has been delivering significant returns in the long run.
- Pays dividends to shareholders, significantly increasing them over time.
What To Expect When Investing in Blue Chip Stocks
Blue chip investing is smart and safe. Or at least that is what is perceived. Most of these companies are well known or are familiar to most people. Familiarity means comfort, and becoming a partial owner of a popular business is tantalizing.
Long-time investors have witnessed blue chip companies survive and outlast the competition. They constantly innovate and adapt to become relevant. They will continue to evolve even as their primary industries change in some way. Those who invest in these companies have also seen massive returns on their investment over time.
Top Blue Chip Stocks
If you have never invested your money or have recently started, you might still recognize most blue chip companies’ names. They stand at the top of their game, providing high-quality products and services used by billions of people.
They are the most stable, most profitable, and most durable company, which usually makes them the safest investment and very valuable to investors. Blue chip stocks are often considered to be the world’s most famous, most mature companies.
Recognize some of them?
- Walt Disney
- Johnson & Johnson
Blue chip stocks are the upper level of listed companies. Although investors may use different criteria to prepare a list of blue chip stocks, the primary qualifying condition is “the best durability.” This is a feature usually less than 50 companies have, so blue chip stocks become an elite group.
These companies are always present in a well-balanced portfolio. Almost every investor will benefit from adding blue chip stocks to their portfolio. How much risk they are willing to take depends on the investor, so owning a set percentage is not a must. The more you want to invest in the stock market safely, the more you should consider investing in blue chip stocks, especially if you have long-term financial objectives.