Are Blue Chip Stocks low risk?

Short Answer

Yes! Blue-chip stocks are low risk and are generally considered one of the safest investments. Blue chips are highly recognized well-established, financially sound, excellently reputed companies.

Detailed Answer

What are Blue-chip Stocks?

While Blue-chip stocks are stocks issued by Blue-chip companies which indicates an equity position in these companies. They generally cost high as they belong to the big players in their respective industries. Plus, they remain profitable whether during good or bad times. Examples include Coca-Cola, Apple, Boeing and many more

Are Blue-chip Stocks low risk?

Here are the reasons why blue-chip stocks are considered low risk:

  1. Blue-chip are companies with the largest market cap and their stocks are highly liquid. This prevents a dramatic share price decline even amidst market unrest. Investors can confidently sell their stocks at any point in time knowing there will always be a buyer.
  1. These companies have already survived the hardest economic hit. Hence, investors are protected from economic downturns and recession.
  1. Big companies boast of stable financial performance and are regarded as a less volatile investment. This means the risk factor is comparatively low as compared with the average stock.
  1. Although the future growth prospects of these companies are low as they are already dominating their sectors. However, investment in blue-chip companies is low risk coupled with low returns when compared with companies with high growth prospects.
  1. Blue -chips are regarded as zero to little debt companies. They are A-rated credit companies that are capable of clearing any financial obligations. Given this, blue-chips stocks are considered low risk with high creditworthiness.


Blue-chip stocks are low risk, highly-reliable stocks issued by industry leaders that can serve as the backbone of any portfolio. They are a sure bet for low-risk investors. That is, individual who wants to participate in the stock market gains but not bet the farm on their stocks. While they can form the core of the portfolio, investors can minimize risk by diversifying their investment portfolio.

Tagged With: blue chip stocksblue chipstocksblue chip companies
Comments (0)
Related FAQs

What are benefits of investing in blue-chip?

Blue-chip are stocks of reputed and financially sound companies. Investing in blue-chip stocks comes with numerous benefits. Let's see what are the advantages of putting money in blue-chip stocks.

Is it a good time to invest in stocks? Bullish Stock Market

There are several questions that one can ask your advisor. These questions include whether its good time to enter or exit the market? Should in exit from debt and move to FD? do I continue my SIP portfolio? and other such questions.

Is Zerodha Safe and Reliable Stock Broker for Trading?

A quick answer to this: Yes, Zerodha is a safe and reliable stock broker for trading and long term investment. You might have heard and read so much about Zerodha, a leading and one of the best discount broker in India. It's just amazing to know about their huge customer base and fast growing company. **Do you ever feel that Is Zerodha safe and reliable stock broker for trading and long term investment?

How does Market Cap affect Stock Prices?

Market capitalisation shortly called market cap is the company’s worth, its ranking and the relative size in an industry or sector. Market cap can affect stock prices, let's see how it is possible.

What are Basic Necessities to Trade in Stock Market Hassle Free?

Learn the basic necessities to trade in stock market in India. Easy stock trading tips for a hassle free experience as a trader or an investor. All you require is an internet connection, laptop or smartphone, active bank account, demat and trading account and there you do, trading in the stock market is simple as booking the movie tickets online.

What is the minimum amount I need to start stock trading in India?

A common question that a newbie trader wishes to ask, what is the minimum amount I need to start stock trading in India? A query whose answer we probably look for to initiate our stock investment journey.

How to become a Successful Stock Trader? Share Trading Tips

To become a successful stock trader, there are a few tips and tricks to keep in mind. Learn and share how you can become a successful stock trader.

Is Paytm Money Safe and reliable Broker for Stock Trading & Investing?

Yes, it is completely safe to invest your money in the stock market using Paytm money App. In fact, PayTm has come up with stock broking services recently and trying to establish itself in the said field. And, to give tough fight to top existing players it has to keep its services up to the mark. Paytm Money made a big name in mutual fund investment industry and now it's time to see its performance in the stock brokers' world.

Can I Invest in Stocks through Groww App?

Yes, now you can easily invest in stocks through the Groww App. It is a popular discount stock broker firm in India who recently expanded its services to the the stock broking arena. It allows traders to invest online without any subscription fees, transaction charges or any other charges.

Can I invest in stocks without PAN card?

No, you cannot invest in the stock market without a PAN card. This is an essential pre-requisite for investing and trading in stock market.