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  Friday November 24, 2017

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WHAT ARE BLUE CHIP STOCKS?
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A blue chip company is a well-known corporation with a long history of growth and profits.  The term "blue chip" generally refers to items of only the highest possible quality.  Stocks of blue chip companies are considered the most elite stocks on Wall Street.

Blue chip companies are characterized by strong stock prices and great past earnings.  They are large, well-known stocks such as AT&T and IBM.  They have a reputation for excellent management and top-quality products and services.  Blue chip stocks are often the leading stocks of their particular industries, which is why they are also referred to as bellwether stocks.

Blue chip stocks are large-capitalization stocks.  This means they have an enormous market value of $5 billion or more.  Market value is determined by multiplying a company's share price by the number of shares it has on the market.  Large-cap stocks make up more than 80 percent of the stock market's entire value.

Blue chips can weather adverse economic conditions better than small-cap stocks, because they are well established and have strong market positions.

Now let's look at the risks of investing in blue chip stocks.




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