Blue Chip Companies
Introduction
Blue Chip
Blue chips are the biggest, most stable, and often the most reputable companies in existence. The term comes from casino houses, whihc use colored plastic chips to represent the money patrons gamble with. Traditionally, blue chips were the most valuable color chip of all; but in gambling today blue chips are among the lowest valued chips, and also the most widely recognized. This is in standing with the financial industry's strong feeling for its own history: investors aren't going to start calling General Motors (GM) a "mustard yellow" stock just to match trends in casinos.
Blue chips are the dominant companies in their respective industries, bellwether behemoths whose sound business practices and established financial security have earned them broad recognition throughout the country, and around the world. Some examples of blue chips that will be familiar to everyone, savvy investor and first-time buyer alike, are Microsoft (MSFT), General Electric (GE), and AT&T (T).
Just as the companies that offer blue chip stocks have some traits in common with one another - massive size, market capitalization of over $1 billion, broad market penetration, and a long, stable history of excellence - blue chip stocks themselves share many traits, which distinguish them from other classes of stock. The primary traits of blue chip stocks are stability in price, regular dividend payments, and high liquidity.
Blue chips are not necessarily expensive, but their price is expected to remain relatively stable, with trends that are broad and easily predictable. We'd all like our stocks to continually grow more valuable, but the hard fact is that they do not. One of the benefits of owning a blue chip is that when it's price inevitably begins to drop, it will generally drop slowly and over a long period of time, allowing a shareholder to identify its downward trend and exit the trade without sustaining very heavy losses. Owners of small-cap stocks or growth
Blue Chip
Blue chips are the biggest, most stable, and often the most reputable companies in existence. The term comes from casino houses, whihc use colored plastic chips to represent the money patrons gamble with. Traditionally, blue chips were the most valuable color chip of all; but in gambling today blue chips are among the lowest valued chips, and also the most widely recognized. This is in standing with the financial industry's strong feeling for its own history: investors aren't going to start calling General Motors (GM) a "mustard yellow" stock just to match trends in casinos.
Blue chips are the dominant companies in their respective industries, bellwether behemoths whose sound business practices and established financial security have earned them broad recognition throughout the country, and around the world. Some examples of blue chips that will be familiar to everyone, savvy investor and first-time buyer alike, are Microsoft (MSFT), General Electric (GE), and AT&T (T).
Just as the companies that offer blue chip stocks have some traits in common with one another - massive size, market capitalization of over $1 billion, broad market penetration, and a long, stable history of excellence - blue chip stocks themselves share many traits, which distinguish them from other classes of stock. The primary traits of blue chip stocks are stability in price, regular dividend payments, and high liquidity.
Blue chips are not necessarily expensive, but their price is expected to remain relatively stable, with trends that are broad and easily predictable. We'd all like our stocks to continually grow more valuable, but the hard fact is that they do not. One of the benefits of owning a blue chip is that when it's price inevitably begins to drop, it will generally drop slowly and over a long period of time, allowing a shareholder to identify its downward trend and exit the trade without sustaining very heavy losses. Owners of small-cap stocks or growth