The phrase ‘blue chip’ is derived from poker where the main expensive chips are blue in color.
As the forename implies, costly and dependable companies have blue chip stocks as a division of their public offerings.
The phrase was named by Oliver Gingold and was initially used to specify high-value stock.
Blue Chip Stock
A company is said to be a blue chip company when it has established its business over long period of time and has faced all the issues in the market but has still survived and become the leader among consistent and responsible products.
It should reflect a safe investment to the investor where it should be the most trustworthy market indices.
On the other hand, this doesn’t mean that company is not subjected to significant risks.
Its categorization is based on the varying circumstances of the market.
What are the features of a ‘Blue-Chip Stock’?
A blue chip stock will always have the prospective to produce high revenues.
It assures a reliable performance, revenue, and income from such stocks is guaranteed even in dry phase of economic changes.
Companies with blue chip stocks have high credit ratings in bonds and in the unsecured debt markets for share trading.
They are counted among diverse or reliable products.
What does a Blue Chip Stock not represent?
It is necessary to understand that even though blue-chip companies sell high-quality-value products and services which are likely to make certain steadiness and development, they are all
though blue-chip companies sell high-quality-value products and services and are known to ensure returns in the worst economic climate with reliable growth and stability, they are all vulnerable to the mistakes in trading including online trading.
Constancy in the precedent does not mean a constant future and it pertains to the blue chip stocks as well.
As consumer and economic trends chiefly pressurize the steady operations of a company, they may come across complexity due to bad choices and poor administration.
When calculating profit, the status of a company and its extensive international credit does not count to anything if they fail to deliver.
Therefore, a clever investor must be conscious of market oscillations, and must take opportune decisions to profit the most from his investment.
What are the best blue chip companies in India?
Some of the best blue chip companies in India are:
Wipro, Tata Steel, Tata Motors, Tata Consultancy Services (TCS), State Bank of India (SBI), Oil and Natural Gas Corporation (ONGC), Reliance Communications, Reliance industries, Mahindra & Mahindra, Bharti Airtel, BPCL, HPCL, ICICI Bank and much more.
For those looking for a long term investment with a regular dividend output, Blue Chip Stock investment is a great option.
In order to benefit a safe and risk-free output, right decisions being relevant to the profit or dividends earned regularly.