Which Stocks Are Considered Blue-Chip And How Do You Trade Them?

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In the stock market, "blue-chip" equities are those belonging to the world's largest corporations. These businesses have a proven track record of financial success. As a result of their popularity, these stocks are also more expensive because they offer steady growth and stability as their primary benefit. Investors who aim to stay in the market for a lengthy period of the time prefer them because of their continuous growth. The usage of an established trading platform like MetaTrader 5 while dealing with Blue-Chip equities is also highly recommended.

 

Blue-Chip Stocks

The term "blue-chip stock" derives from the poker game, in which the most valuable color of the chip is blue. There is no single definition of what constitutes a "blue-chip" stock. Individuals may break the rules from time to time, but generally speaking, blue-chip stocks are those belonging to corporations that have been in a strong financial position for a long period of time. They also pay dividends to shareholders for an extended period of time.

Corporations on the other hand tend to be smaller and less well-known, while blue-chip companies tend to be more well-known and profitable. Because of this, it is impossible for them to lose any of their market shares. This is a list of companies that frequently repurchase stock when the market is favorable.

What Makes Blue Chip Stocks Popular?

As a result of their stable return rates, blue-chip stocks are popular. In tough economic times, the road ahead may be difficult, but they are the kinds of businesses that, over time, produce a healthy return on investment.

In this instance, volatility is also unimportant. The ups and downs of a young company are predictable because they are not yet established. Blue-chip stocks, on the other hand, have a tendency to remain stable despite occasional fluctuations in their value.

The financial strength and stability of these blue-chip stocks is what attract investors the most. As a result, they have a steady stream of income from dividends that aren't put in jeopardy by trading on MetaTrader 5.

Blue-chip Stocks Examples

These three are some of the most popular blue-chip stocks that you may invest in.

Amazon (AMZN) – In 1994, Jeff Bezos established this business, which he named after himself. It began as a bookseller but quickly evolved into selling about anything you can imagine. Its low-priced products provide it an advantage over its rivals. It will be worth $1 trillion by the end of 2020.

Alphabet (GOOGL) – GOOGLE is an essential part of modern life, and you can't live without it. Alphabet is the firm that runs Android, Chrome, and Google, three of the most popular tools we have today. Waymo and Verily, two lesser-known startups, are also part of the group. It is expected to be worth $1 trillion by the end of 2020.

The Coca-Cola Company (KO) – This corporation is well-known around the world, and it employs 700,000 people at its various locations and with its bottling partners. As of December 2020, it is worth $229 billion.

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