9 Reasons Why You Need Blue Chip Stocks in Your Portfolio
And like coca-cola or Nestle, these underlying companies are household names that have stood the test of time.
Blue-chip stocks are the ivy league of investment stocks. They are shares of companies known for excellent performance history.
Their excellent performance and track records over time make blue-chip stocks some of the most secured investments.
They should form a part of your diversified portfolio to help balance the possible losses in market downturns.
It’s vital to have blue-chip stocks in your portfolio.
But before we dive into that, let’s have a quick overview of blue-chip stocks.
What are Blue-chip Stocks?
Blue-chip stocks are shares of long-standing companies that are well established, big, and financially stable.
Why You Should Have Blue-chip Stocks in Your Portfolio
Blue-chip stocks should be a part of your well-diversified portfolio. Naturally, they are more expensive but are totally worth it.
1. Safe Dividends
Your primary concern as a dividend investor is the safety of your dividends. That is, you continue to steadily receive your share of the company’s earnings.
2. High Returns on Investment
Historically, blue-chip stocks have performed better than the general stock market, which averages 8% to 10% return. Blue-chip stocks can return up to 12%.
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