Blue-Chip Stocks
Blue-chip stocks are stocks of large, well-established and financially sound companies that have operated for many years. These stocks are known for their consistent dividend payments, stability, and high quality. Blue-chip stocks are usually found in the S&P 500 and the Dow Jones Industrial Average, two of the most widely followed stock market indices. They are considered to be a safe investment, as they are less likely to experience large swings in price and are less likely to go bankrupt than smaller companies.
History of Blue-Chip Stocks
The term “blue-chip stocks” was first used in the 1920s by Oliver Gingold, an employee of Dow Jones & Company. He used the term to refer to stocks that had consistently outperformed the market. The term was later popularized by Wall Street Journal columnist Bernard Baruch, who used it to refer to stocks of large, well-established companies that had a history of paying dividends. Since then, the term has become widely used to refer to stocks of large, financially sound companies.
Comparison of Blue-Chip Stocks
| Characteristic | Blue-Chip Stocks | Other Stocks |
|---|---|---|
| Market Capitalization | Large | Small |
| Dividend Payments | Consistent | Inconsistent |
| Price Volatility | Low | High |
| Risk of Bankruptcy | Low | High |
Summary
Blue-chip stocks are stocks of large, well-established and financially sound companies that have operated for many years. They are considered to be a safe investment, as they are less likely to experience large swings in price and are less likely to go bankrupt than smaller companies. For more information about blue-chip stocks, you can visit websites such as Investopedia, The Motley Fool, and Yahoo Finance.
See Also
- Value Stocks
- Growth Stocks
- Dividend Stocks
- Index Funds
- Mutual Funds
- Exchange-Traded Funds (ETFs)
- Stock Market
- Stock Valuation
- Stock Splits
- Stock Buybacks
