What are blue chip stocks? Are blue chip stocks safe? Should I invest in this stock or not? All will be revealed in the article below. Follow along to get your own answer!
What is Blue chip stock
?The name “Blue chip” is derived from the cards used to exchange money when playing poker at casinos around the world. In particular, the word “chips” refers to plastic cards that exchange money with different conversion values. They depend on the color of the card. Usually they will have colors such as: Blue, red, yellow, white.
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What is Blue Chip Stock?
According to the regulations, the green card will have the highest conversion value. Therefore, the words “Blue” and “chip” combine to refer to high-quality stocks issued by major companies in the world. What is Blue Chip Stock?
This is a stock for stable income, relatively low risk even though its dividends are not high. Blue chip stocks (also known as blue chips) are usually issued by large companies with market capitalization around the world.
For example, in the international market, there will be stocks of companies such as Coca Cola, Microsoft, IBM, etc. Bluechip stocks can be said to be stocks of famous companies in the world. Because, its revenue level is stable and there is no excess debt allowed.
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Therefore, the form of blue-chip stocks will be paid regular dividends even if the company’s business performance is not good. Through this, you probably have the answer to the question: “What is Bluechip stock?” already!
Is Blue chip stock safe
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Advantage of Blue chip stock
What is Bluechip stock? As information above, Blue chip is the stock of large companies. Therefore, this type of stock can be considered very safe for investment. Large companies can balance themselves even in the midst of an economic downturn.
Advantages of Blue chip stock
Therefore, if the price does fall, it will only fall less than the stocks of other small and medium companies. On top of that, Blue chip issuers will also commit to shareholders a fixed dividend. So these types of stocks have attracted a number of people who want to invest in.
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Disadvantage of Blue chip stock
Besides the information about Blue chip stock, what is it? The disadvantages of Blue chip stock make customers quite worried. Because in addition to the advantage of being safe and fixed dividends, this stock also has some disadvantages. That is, its return will be smaller than that of other stocks on the market.
Or even just because it’s a big company, its growth is relatively slow. So the profit you get when investing in this stock is quite low. If you want to receive a high return, then choose to invest in other types of stocks. Because safety also means less profit. Therefore, consider before investing!
Through the above information, you must have had more information about blue chip stocks already! Consider considering before investing to bring high returns for yourself.
