For Investors, the Blue Chip Stocks Hold the Long-Term Value
When I began looking into investing in the stock market, I wanted to research stocks that are profitable, which lead me to Blue Chip Stocks. At first, I had no idea what was meant by a Blue Chip Stock, so I continued researching the topic and came across several sites which gave me a lot of helpful information. Through my research, I found that Blue Chip Stocks are some of the greatest stocks in the market that most people don’t know about. In this post, I want to combine the information I learned through several sites, so you can decide if Blue Chip Stocks are the right direction for you and your investments.
There is no set definition of what a Blue Chip Stock is, but this doesn’t mean there isn’t a generalized idea of what Blue Chip Stocks are. Blue Chip Stocks are the best, financially sound, and stable stocks from a well-established company. They are generally chosen by investors who want well-established stocks with low risk. Blue Chip Stocks have a market value which typically ranges in the billions as these companies have been around for years and have a history of growth and profit.
Blue Chip Stocks are usually found in places such as the Dow Jones Industrial Average, as they are some of the most popular stocks. The majority of companies you hear about daily are generally Blue Chip Stocks. Many investors also purchase Blue Chip Stocks because they’re great for dividends.
The Blue Chip Stock Value and Stocks to Look For
Today, Blue Chips Stocks are some of the fastest growing stocks in the investment world, gaining the attention of investors from all over. The companies that hold Blue Chip Stocks have been around for years, through economic booms and falls. This is one of the biggest reasons investors are starting to pay more attention to Blue Chip Stocks—if a company can survive and thrive through tough economic times, their stocks are pretty sound.
An investor can also find Blue Chip Stocks through financial statements. Not only are the balance sheets well-managed and huge, but they hold better profit margins than their opponents. There are several reasons why Blue Chip Stocks hold such high standing over other stocks. Some of these reasons are because of the branding of the company, economies of scale, and pricing power. It’s believed that the reason the stocks received the name ‘Blue Chip Stock’ is that in poker, the blue-chip holds the highest value.
More companies than you might realize have Blue Chips Stocks. Examples of companies which hold these types of stocks are Johnson & Johnson, Walmart, Walt Disney, Visa, Coca-Cola Company, Apple, Caterpillar, and McDonald’s. Johnson & Johnson is considered one of the best Blue Chip Stocks to get because they have moved 62% of move-in stocks over the last three years. For Blue Chip Stocks, the higher the percentage of move-in stocks, the more you want to invest because you’re easily protected if there’s ever a drop.
Apple is another Blue Chip Stock which is considered on the best list. Over the last decade, Apple has skyrocketed on the list and is now considered to hold everything investors desire in a Blue Chip stock from potential top investments, such as their secret electric car to brand loyalty and solid business.
Another strong Blue Chip Stock investors are choosing for their 2019 investments is Caterpillar. The revenue growth for Caterpillar is at a strong 18% with a 2.6% dividend. And while Caterpillar has seen some rocky times, if you’re an investor who doesn’t like rocky, then Caterpillar might not be the one for you—they hold a 63% of earnings per share.
The Benefits of Blue Chip Stocks
Along with what we’ve already discussed, Blue Chip Stocks hold great benefits. Since Blue Chip Stocks have held value for so long, they give you a sense of security during times of financial crisis. One of the top reasons investors tend to pick Blue Chip Stocks is due to this financial security in case there is an economic downturn, which is something the United States has seen many times. But this system is a bit of a cycle; because investors feel they’re safe with Blue Chip Stocks, they will secure these stocks when the United States enters into an economic slump. And it’s because of the investors that Blue Chip Stocks are usually able to hold their own during an economic downfall.
Even if the companies are hit with an economic downfall, investors know that the companies will recover quickly because of their history, pricing, and profitable products. This occurs because the dividends are so high in the stock that when the price fluctuates, they will be able to bounce back quickly as the dividends make up for the drop. Investors can quickly grow their portfolio with Blue Chip Stocks because they are so secure, even in times of slow economic growth.
Overall, the strongest benefit of Blue Chip Stocks is that they have proven they can survive not only difficult market cycles but also other tough situations that companies deal with. These are the type of stocks investors want because they make them feel secure, especially financially. Even if a person doesn’t have a lot of financial stability due to an economic slump, they have stability within their Blue Chip Stock, which gives them a sense of ease. These are exactly the type of stocks you want to hold when there is an economic downturn.
How to Pick and Invest in Blue Chip Stocks
First, you should find an investment advisor before you decide to officially invest in any stock. An investment advisor will not only advise you in selecting bonds that best fit you, but they will also monitor your stocks once you’ve bought them. Even if you’ve invested in stocks before, chatting with an investment advisor—if you don’t already have one—is always the safest way to go. On top of this, you will also want to continue to do your research as investing in any stock isn’t a quick decision.
Next, you will want to make sure you understand the ins and outs of investing in stocks. You will want to read up on the most recent stock reports and can discuss some of this information with your investment advisor so, especially if you’re new to investing, you understand everything as well as possible. When you’re looking into companies to invest in, make sure you check out their history. You will also want to compare and contrast stocks as this will aid you in finding your chosen stocks.
When you’re finally ready to purchase the stocks, you can do so through investing in EFTs, mutual funds, or a brokerage firm. If you decide to go through a broker, there are many different ways to go about this, such as online, a discount broker, or a full-service broker. They will help you fill out all the necessary paperwork. Once you’ve completed these steps, then you can deposit with your broker. From there, you will place your first buy.
Interested in More Than One Blue Chip? Try a Blue Chip ETF
You’ve made your decision that you’re going to purchase a Blue Chip Stock. But, as you sit down with your research and advice from your investment advisor and broker, you begin to wonder which Blue Chip Stock is right for you. Trying to make your decision, you continue to search. The thing is, you can stop searching as you can pick more than one Blue Chip Stock, which is known as a Blue Chip ETF.
Even though Blue Chip Stocks are known to be some of the best for investors due to their long-term history, economic recessions happen. The recession during 2008 and 2009 proved that not all Blue Chip Stocks make it through tough economic times, as a few went bankrupt. However, there is a way to help your portfolio if you pick a Blue Chip Stock that eventually does go bankrupt and this is by picking a basket of Blue Chips. If this is the route you want to go, it’s encouraged for you to buy low-fee Blue Chips. A Blue Chip EFT will not only increase your portfolio, but it’ll also make you gain a large gap exposure.
Even when you’re looking to purchase Blue Chip ETF, there are some stocks you can choose from. Of course, because Blue Chips are a hot topic for investors, many people have already created and shared their advice for buying Blue Chip ETF. Some of the stocks that are most common in a Blue Chip ETF basket are Vanguard Russell 1000, iShares MSCI EAFE, ProShares Short S&P500, and PowerShares QQQ. The PowerShares QQQ is known as one of the unique Blue Chip ETFs because it holds a lot of technology companies, such as Apple and Amazon.com. The iShares MSCI EAFE Blue Chip ETF stock is known as a quick gain, which makes it one of the most popular. The companies which are involved in the iShares MSCI EAFE ETF stock are Toyota, Roche Holding, and Nestle.
Related Questions You Might Have
How do I go about finding Blue Chip Stocks?
Blue Chip Stocks are pretty easy to find; you don’t even have to look to Google to help you figure out what stocks are Blue Chip and which stocks aren’t. Instead, you can start by looking around your house to find products you will need over the next couple of decades. For example, Johnson & Johnson is a Blue Chip Stock with many products that we will continue to need.
Is there a list of Blue Chip Stocks from previous years I can look at and compare with a more current list?
Yes, there are Blue Chip Stock lists from previous years that you can use to compare stocks. While most of the lists you find only go back a few years, you can go further back if you do a little bit of research. For instance, the website known as The Motley Fool has lists that go back into at least 2006 for popular Blue Chip Stocks. You can then take this list and compare it to the current list of 2018, or the predictions lists for 2019.