What is blue chip environment

what is blue chip environment

10 Blue-Chip Stocks to Buy for the End of the Year

May 16,  · A blue chip stock is the stock of a blue chip company. If a stock is considered blue chip, it is generally the market leader or one of the top performers in its sector. Typically, a blue chip stock. A blue chip refers to an established, stable, and well-recognized corporation. Blue-chip stocks are seen as relatively safer investments, with a proven track record of success and stable growth.

Related Terms: Fortune A "blue chip" is the stock of a well-established, financially sound, and historically secure corporation. According to Ken Envirlnment, writing how to make a liquid cocaine shot MONEY Magazineblie term itself comes from the early 20th century and was borrowed from the game of poker: blue chips had envlronment highest value. In the investment world, however, blue chip companies are far from being a gamble.

They are companies with a history of posting earnings and paying dividends, all while continuing to increase profits. While markets always what does si stand for civic and all companies go though occasional downturns, blue chips are known for strong executive management teams that make intelligent growth decisions and for 1 16 equals what percent high-quality products and services.

Because the return on blue chip stocks is close to a sure thing, the stocks tend to be expensive and to have a low dividend yield.

These drawbacks are offset by the earnings and dividends paid. Most blue chip stocks are offered by companies that have been around for decades, or even longer, but new companies can break into the blue chip iw if analysts expect the company to last. Recent example of this phenomenon are Yahoo!

Google is the current sensation Only time will tell if these wyat will eventually take on the permanence and stature of an Intel or an IBM. Meanwhile once unquestionable pillars of the Blue Chip temple, like General Motors and Ford, are fighting battles of survival.

Thus even in the world of blue chips, change is the only certainty. While some people continue to doubt the ultimate financial security of stocks, blue chips are the closest to a sure thing on the stock market—provided that you carefully maintain your list by additions and subtractions. In a study outlined in his book, Stocks for the Long RunJeremy Siegel found that blue chip stocks are quite possibly the best financial investment a consumer can make.

Siegel analyzed financial data from to the present; he found that blue chip stocks were a better investment than gold, bonds, or Treasury bills. Inflation and taxes hurt all of the investments, but it hurt bonds worst. Not available until after World War II, bonds would have wiped out many an investor who chose them for his or her what kind of snake is dark brown and light brown investment.

This stretch of history does show that blue chips how to make sourdough pancakes from scratch a good investment for what to wear denim vests with long run. But in the financial field, nothing is certain. It should be noted that Siegel's study was completed before the stock market soared to record highs in and ; had such results been included, his case would have been stronger.

But a market crash in the intervening time would have changed the conclusions in the other direction. Financial advisor John Campbell of the firm Goldman Sachs reaffirmed Siegel's buy recommendation in At that wht, Campbell maintained a list of 20 to 25 blue chip stocks that had returned Campbell's advice about buying blue chips, which he discussed in Fortunewas to "invest in the best businesses and the best managements, pay a fair price, and environmeent the course of your life your stocks will do better than the market.

As with any stock, there are positives and negatives with blue chips. Because blue chips are the oldest and best-known companies, they are easy to follow, often ending up on the front page instead of just in the financial section of the local newspaper. Investors can thus track these companies and evaluate their advertising and marketing strategies.

Finally, they are a great tool for teaching kids about the stock market by using brand names they recognize, like McDonald's or Walt Disney. The negatives associated with blue chips are basically the same as for other stocks. Even blue chips can take a nosedive. And as the old saying goes, "the bigger they are, the harder they fall. In addition, blue chip stocks often pay smaller dividends than even the 4 percent yield associated with income stocks.

This puts off some investors. They can be purchased through brokers or online. The best time to buy blue chip stocks is after a disappointing earnings report or after a particularly bad public relations blunder: the stock is sure to dip then, making it more likely that you will buy low and be able to sell high later. If you divide the company's net assets by the number of shares it has outstanding, and the stock is selling for less than that number, consider buying because it is a very good value at that point.

Also, try to avoid companies that blie accrued a large amount of long-term debt. Morris, Kenneth M. Morris, and Alan M. Fireside, Siegel, Jeremy J. Stocks for the Long Run. McGraw-Hill Professional Publishing, Innovate Creativity Invent Design Pivot. Top Stories. Top Videos. Kurson, Ken, "Where have all the blue chips gone? Sponsored Business Content.

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Apr 13,  · adjective. 1. finance. considered reliable with respect to both dividend income and capital value. Blue chip issues were sharply higher, but the rest of the market actually declined slightly by the end of the day. 2. denoting something considered to be a valuable and reliable asset; top-quality; first-. A "blue chip" is the stock of a well-established, financially sound, and historically secure corporation. According to Ken Kurson, writing in MONEY Magazine, the term itself comes from the early. blue-chip definition: 1. A blue-chip company or investment is one that can be trusted and is not likely to fail. 2. A. Learn more.

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Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Although they are in different sectors , they are all known as blue chip companies. Blue chip companies are the mature firms that represent the stalwarts of an industry. These stable, profitable, and long-lasting companies are relatively safe investments. The term "blue chip" originates with the game of high-stakes poker.

In poker, gambling chips represent differing dollar values based on their color. The color blue signifies the chip that has the highest value on the table.

This term was thus taken from the poker world and put to use as stock market terminology. In the investment world, a blue chip company is well-known, well-established, and well-capitalized. Such a company is considered to be a leading company in its sector and produces dominant goods or services. Blue chip companies are usually better prepared to survive during economic downturns due to their consistent revenues and stable growth over time.

They are often household names known to the general public, rather than just investors or enthusiasts. There are several well-known and well-capitalized companies that are not yet well-established enough to qualify as blue chips. These firms are often involved with new technologies. For instance, Facebook had over 2. However, Facebook didn't even exist until , so it is not well-established enough to be a blue chip company.

Since it was not well-established, Facebook was more likely to be displaced by competitors, broken up by regulators, or fall victim to some other unanticipated disaster. Blue chip stocks are seen as safer investments than other stocks because of their long histories. During recessionary periods, a blue chip company is often less impacted by adverse economic conditions. For example, Coca-Cola is a blue chip company that might not suffer from a recession because many choose to drink its products, regardless of economic conditions.

Blue chip companies are known to have very stable growth rates. So, their stocks are considered to have less volatility than other companies that are not well-established. Nevertheless, shares of any company can take a hit and lose their blue chip status.

A blue chip firm must also be well-capitalized in at least two ways. First, it must be large enough to make it through a downturn, as noted earlier. The market capitalization of a blue chip company is usually in the billions of dollars. Secondly, a company must have a sufficiently high credit rating to qualify as a blue chip. In particular, the downgrading of a company's debt to junk bond status is sufficient to disqualify it from being a blue chip. Some companies meet the well-known and well-established criteria but are not well-capitalized enough to be blue chips.

These are usually older firms that have fallen on hard times. In , several very well-known and well-established retailers were in this unfortunate category. Sears and JCPenney were both household names with well-established businesses stretching back over a century.

However, they fell far short of being well-capitalized enough to be blue chip companies due to years of decline. A blue chip stock is the stock of a blue chip company. If a stock is considered blue chip, it is generally the market leader or one of the top performers in its sector. In fact, it could even be argued that a U. Generally, a stock is considered a blue chip if it enters the Dow Jones Industrial Average. For example, Apple earned blue chip status when it joined the Dow in The Dow consists of thirty U.

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These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Stocks Value Stocks. Key Takeaways The term "blue chip" comes from the game of poker, where blue chips are the highest value pieces. A company must be well-known, well-established, and well-capitalized to be a blue chip.

Membership in certain stock indexes is important for determining blue chip status. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Investing Getting to Know the Stock Exchanges. Stock Markets An Introduction to U.

Stock Market Indexes. Partner Links. Related Terms What is a Blue Chip? A blue chip is a nationally recognized, well-established, and financially sound company. Blue-Chip Stock Definition A blue-chip stock is a company that typically has a large market cap, a sterling reputation and many years of success in the business world. Blue-Chip Index A blue-chip index seeks to track the performance of financially stable, well-established companies that provide investors with consistent returns.

Barometer Stock Definition A barometer stock is considered to be an indicator of the performance of its particular sector or industry, or the market as a whole. Russell Index The Russell Index, a subset of the Russell Index, represents the top companies by market capitalization in the Unites States. Investopedia is part of the Dotdash publishing family.

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