What are benefits of investing in blue-chip?

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

  1. Blue chips stock presents opportunities to invest in stable, well-performing, financially stable companies with minimal risk.
  1. Blue chips stocks are generally the most liquid stocks. You can buy and sell stocks very easily.
  1. 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.
  1. Although blue chips are not immune to extreme economic downturns, they are not easily shaken even in times of market volatility.
  1. 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.
  1. Steady cash flow, A-rated credit, long records of uninterrupted dividend payment, they are typically the most secure investment stock with less risk.
  1. 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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Related FAQs

Are Blue Chip Stocks low risk?

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.

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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.

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There are various terms that play a huge role in determining how to choose stocks for long term investment such as P/E ratio, dividend consistency, etc. For a more elaborative information head below and read the explanation given for better understanding.

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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.

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Real estate is great if you’re looking to lease out the building to have a steady income. No doubt, in the long run, the land also could be sold to make a huge profit.

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Can NRI invest in Indian stock market?

Yes, NRIs can invest in Indian stock market. It is essential for the individual to check if he is considered as NRI or not according to the norms of the government. If yes, only then he can invest. There are also certain rules and regulations that must be followed.

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