What are blue chip companies ?

What is blue chip refers to?What are blue chip companies?Who can invest in blue chip companies?

ORIGIN

The term “blue chip” has been derived from poker.In game,poker there are various colour chips like red chip,white chip,blue chip,but among all the blue chip is the most precious chip.These chips are highest in value.

Which companies are blue chips?      

Blue chips are those companies which are well established,financially stable,well recognized.These companies have very less volatile.These companies have very less effect during economic down term.They have shown consistency and have stable performance.The market capitalization of these companies are in billions of dollars.They are usually market leaders in their sectors.Some examples of blue chip companies in India are TCS,Reliance industries,Infosys and many more.

                                                     

Blue chip stocks

Blue chip stocks are the shares of blue chip companies.Blue chip stocks are generally priced high because of its reputation in market.These companies can easily bought or sold as there is always supply and demand of these stocks.However investor must keep in mind that these companies are not hundred percent reliable as these companies can also become financial unstable.Before investing one must check the financial ratios and the financial statements before investing.

                                                         

Who can invest in blue chip stock?

Every person should have a blue chip company stock in their portfolio,but investor must keep in mind that these stocks are for long term.You can’t expect quick returns from these stocks therefore before investing in these stocks investor should determine whether he/she has patience and after that must invest