Ready to buy blue chips?

Blue-Chip Stocks are reputed stocks with high value and these are the only stocks performing well from past records. They are expensive yet they are reliable though they do not present instant profit. People refer “Blue Chips” most valuable and stable stocks on the stock market. The “Blue-Chip” derived from people who used the blue chip as the highest bidding chip in the game of poker. In the investing game, blue chip stock is still referred as highest bidding chips.

Blue chip Stocks are a very high quality investment involving a lower-than-average risk of loss of principal or reduction in income. The term is generally used to refer to securities of companies having a long history of sustained earnings and dividend payments. Blue- Chip stocks are a security from a well-established and financially sound company that has demonstrated its ability to pay dividends in both good and bad times.

Blue Chip share in India are Reliance, Wipro, Infosys, Bombay Dyeing, Hindustan Lever etc.

How to invest in blue chip stocks?
There are several ways that an investor can acquire shares. He can buy blue chip througha broker, a direct stock purchase plan or a dividend reinvestment plan. Many mutual funds specializes in blue chip stocks, an investor can also purchase such mutual funds.

Is investing in Blue chips is safe?
The answer is not really. An expensive blue chip share today could become a useless tomorrow. Always remember that there is always a risk related with stocks no matter whether it is blue chip or not. In addition, investing in stock is gamble and just the blue chip is the safer stake.

Blue Chips have a large market capitalization. The result is market capitalization when the number of shares in a company is multiplied by its current price. A large market cap indicates a liquid stock. The share of blue chips is among the largest companies in their relevant regions.

The most important advantage of their size, they are more stable than the other stocks. Hence, they are not very unstable to great extent as if others are. That is why they are favorite with conservative investors.

From time to time you will need to review your strategy and may wish to adjust the ratios you originally assigned to your investments.