Even when the market is volatile, blue-chip stocks don’t stop being a significant part of investment plans. When you hear of blue-chip companies, think of the huge stable companies—pillars of the economy. They make up big portions of many investment portfolios because they are low-risk.
The coronavirus is greatly affecting the market—and not in a good way. Many investors have no idea what to do with their portfolio. Blue-chip stocks are selling at a much lower price and it may be wise to buy them during a downturn.
What Are Blue-Chip Stocks?
It is hard to come up with a perfect definition for blue-chip stocks. So, to help you understand, here are the characteristics of companies in that category.
Large market cap: they are big fish in the stock market. Large-cap stocks are those with a market cap of $10 billion and over.
History of stable earnings: the blue-chip status is not achieved overnight. These companies have built a reputation for decades.
Good growth prospects: once they become blue-chip companies, these businesses don’t stop there. They focus on future growth.
Market leadership: the companies are known even to non-investors.
Why Invest in Blue-Chip Stocks?
Even when the market is shaky, blue-chip stocks remain to be a great investment. Their characteristics ensure a high chance of outlasting a market downturn.
The prolonged effects of a recession and a huge decrease in revenue are enough to kill most companies. But the extensive borrowing and deep pockets of blue-chip companies will keep them open even in the worst of times.
Here are some blue-chip companies that have lived through market downturns:
- JPMorgan Chase
Buying Blue-Chip Stocks
You can easily get a blue-chip stock if you own a brokerage account for selling and buying stocks in the U.S.
Follow the steps below:
- Conduct an extensive research on blue-chip stocks.
- Pick a blue-chip company that you like.
- Place an order in your account.
Where to Get Blue-Chip Stocks
If you have access to Nasdaq or NYSE stocks or an investment app, you can purchase blue-chip stock. Many experts recommend the following top brokers.
- TD Ameritrade
- Fidelity Investments
- SoFi Wealth
A List of Blue-Chip Stocks
Finding a comprehensive list is not that simple. But you can start at the Dow Jones Industrial Average (DJIA).
Here are a few blue-chip companies:
- 3M Company
- American Express Company
- Apple Inc.
- The Boeing Company
- Cisco Systems, Inc.
- The Coca-Cola Company
- The Walt Disney Company
- Johnson & Johnson
- Nike, Inc.
- Visa Inc.
- Walmart Inc.
Blue-Chip Vs Large-Cap Stocks
All large-cap stocks are not blue-chip stocks. Some large-cap stocks are not strong enough. Generally, many large-cap stocks make a safe investment. But market capitalization should not be your only determinant. Not every company will stay big.
There are mutual funds and ETFs whose sole focus is blue-chip stocks—think S&P 500 funds.
Blue-chip funds make an awesome investment and a diverse fund will help your portfolio when the market is volatile.