Blue Chip Stocks

In poker, the blue chips on the table have the highest value. In the stock market, blue chip refers to companies who are considered leaders in their industries and show promises of long-term success. Blue chip companies and their stock are well-established, provide a long history of the growth, have a good reputation for dividend payout, have good quality, and usually have a very recognizable brand. In fact, these companies are the standard by which other firms in the field are judged. These companies are included in the Dow Jones industrial average, which is an index of only 30 companies that are the key leaders in their industries. IBM, McDonald's, Coca-Cola, and others are blue-chip companies you have likely heard of. If you want stocks that grow fairly readily, bear relative low risk in the long term, and pay moderate dividends, blue-chip stocks are likely for you. While these are not a deal -- the stocks tend to be the most expensive -- over years they can produce a lovely profit.