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martes, 6 de enero de 2015

What are Blue Chips stocks?

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Blue chip stocks represent the shares of companies that are nationally and internationally recognized and have a strong and stable financial position.

Overall, these firms sell products or services of high quality and wide market acceptance.

The term blue chip, which is used in American casinos to identify the blue chips, which have the highest value, was added to the "market jargon"  by  Oliver Gingold an employee of the Dow Jones financial firm in the 20s.

Investments in shares of blue chips companies are considered less volatile, and often have a high value of market capitalization and high liquidity.

The "blue chips" stocks are an excellent choice for those who wish to diversify their portfolio without taking a high risk.
 

These companies are in an excellent financial status and are considered by stock analysts as a safe investment or low risk, besides having an excellent rating by the rating agencies.

In times of financial crisis, when the stock market falls, the "blue chips" tend to hold better than the remaining market stocks.
 

Advantages of investing in blue chips

Dividends

Most blue chips establish on a regular basis dividend payments, even if the company is in a worse position than usual.
 

Liquidity

The high liquidity of these stocks allows investors to buy and sell them at any time
and almost always at the desired price, unlike other stocks which due to their lack of liquidity may take time to buy or sell.

Trading volume

The high degree of trading volume of blue ships allows investors to benefit from the dynamism of their price, as it indicates that there are many people or
investors groups who are interested in the company.


Stable values


Generally, their evolution is uniform, and do not include large
bullish or bearish movements, except in turbulent periods, which can lead that prices skyrocket in either direction. The investor can expect that there will be no major surprises in the stock quote.

Low volatility

Being strongly consolidated companies, their volatility is very low. They are not desirable stocks for short-term speculators.
 


List of US blue chips

The following is a list of blue chips of United States:
  • IBM
  • Exxon
  • 3M
  • JP Morgan
  • AT&T
  • Microsoft
  • General Motors
  • General Electric
  • Intel
  • Bank of America
 

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