What are benefits of investing in blue-chip?
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- Updated On:23-Jan-2021
- Replies:1
Short Answer
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.
Detailed Answer
- Blue chips stock presents opportunities to invest in stable, well-performing, financially stable companies with minimal risk.
- Blue chips stocks are generally the most liquid stocks. You can buy and sell stocks very easily.
- Regardless of the market condition or economic scenarios, stable and strong dividends are provided to investors. Unlike mid or small caps companies that tend to invest all their earnings to promote company growth.
- Although blue chips are not immune to extreme economic downturns, they are not easily shaken even in times of market volatility.
- Being a long-term investment spanning over 7 years, blue-chip tends to accelerate the steady growth of investors portfolio. A great way to achieve long term financial goals and build wealth over time.
- Steady cash flow, A-rated credit, long records of uninterrupted dividend payment, they are typically the most secure investment stock with less risk.
- Blue chips comprise seasoned, strong management teams. This reputation tends to make them dependable with transparent operations. Plus, it gives a sense of confidence that your stocks can survive any tying times.
Conclusion
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.
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Discussion (0)
One can either invest in bluechip companies or research extensively on the companies they feel would give returns. It also comes down to the type of investment they are ready to make. Hence, figuring out the different companies could take time, experience, and research.
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