Why Are Blue-Chip Stocks Beneficial to Investors?

By: Kailey Kisner

Why Are Blue-Chip Stocks Beneficial to Investors?

Blue-chip stocks are stocks of a company that is very well established and has a good rate of growth over a long period of time.  Click here to find out more about what blue-chips are and where the term came from. Out of every type of stock you could invest in blue-chip stocks have a decent rate of return between 8% and 12%.

Many people start to invest in stocks around the age of 18. At that time you don’t normally have a steady income that allows you to live on your own. Many college-aged adults are still mostly living off their parents so, the chances of them having a steady income is lower than middle-aged adults. These stocks are good for people who don’t have high risk tolerance. Risk is a very important factor when it comes to investing. Blue-chip stocks have very low risk attached to them.

For beginners, blue-chip stocks may seem like boring companies everyone knows about but, that is their benefit. For a company to have a good reputation it would have been around for a while. These are the stocks that wealthy businesses invest in. Stock markets crash and when they do your holdings will drop but, blue-chips tend to fall less due to yield support. To learn more about wealthy businesses and why they invest in blue-chip stocks click here.

Blue-chip stocks have low risk, a decent rate of return, and are good for both beginners and wealthy businesses. That is their benefit to investors. Some companies considered blue-chips are: The Coca-Cola Company, Johnson and Johnson, and Chevron. These are big names that have been around for a while. They will continue to be around for years to come. So, you can invest in these companies anytime. For more information click the link below.

WHAT IS A BLUE CHIP STOCK? (Dividend Stocks & Income Investments)