A Blue-Chip Stock is concerned with a big company having great goodwill. All the Blue Chip shares include well-settled huge and financially well companies and have been operational for many years along with paying stable returns and dividends to the investors. A Blue chip share often has a valuation of at least a billion dollars or more. It monopolizes its sector and usually has a position in the top 5. It answers the question: What is a Blue Chip share?
Blue-chip shares are well-preferred by investors to buy. Berkshire Hathaway, Apple, Coca-Cola, etc., are famous blue-chip stocks. They are at the top of their respective sector and also dominate them.
Are Blue-Chip shares safe to invest in?
Many companies face financial and survival problems as per the market cycles. But Blue chip stocks usually survive all such challenges precisely. Hence, it is considered a safe investment when investing in blue-chip stocks. Although, the bankruptcies of Diwan Housing Finance, Bhushan Steel, and many other companies, prove that leading companies may also struggle in crisis.
Blue Chip stocks are among the investment options which are safe. They have the potential to endure losses and many economic downturns. On the other hand, they are not highly volatile. They convey slow growth. Also, they have a growth potential that is moderate. Blue Chip share is usually a dividend-paying company. So, money is paid quarterly. Having a Blue Chip stock increases your chances of hedging your investment. Also, to remain with wealth and profitability till the end. Lastly, it is a great idea to invest in blue-chip as it diversifies your portfolio.
How to invest in the Blue chip shares?
In order to invest in the Blue chip stocks, you have two ways:
- To invest individually
- To purchase mutual funds or ETFs
Suppose you want to invest individually. Having a Demat account is mandatory. You can open a Demat account from any broker or bank, after you have a Demat account, you are ready to invest. It is not mandatory that you need a large amount to invest individually as you can start from small as well. On the other hand, Mutual funds (MFs) and ETFs are also the best options in Blue chip shares and the stock market. ETFs mean Exchange-traded funds. And the Mutual fund is also a similar investing fund. In ETFs and MFs, you can start with a small amount to enjoy your investing. The potential growth of MFs and ETFs is stable throughout time. So, if you’re a bit experienced, you can invest individually. But if you are new, then MFs and ETFs are strongly advised.
Conclusion:
Blue-Chip Shares are the stocks of the big companies. They are well settled and financially strong cooperations. It has slow but moderate growth. The Blue Chip is an originated term that comprises the highest value outstanding among the red and white chips. It is almost safe to invest when it comes to blue chips. It is also stable and moderate. If you want to invest in Blue Chip Stocks, you can do it individually as well as via mutual funds or ETFs.