One of the biggest question that arises before you invest in Bluechip stocks is What is Bluechip Stock? Basically Bluechip Stocks are those stocks which have highest value. Furthermore these stocks are those stocks which are well-known and well-established. Bluechip companies are those companies which make good profits. While these companies also have high track record of giving superior return YOY.
Well the world Bluechip has been taken from the poker game where a bluechip holds the highest value. Several investors have this thinking that the bluechip stocks offer stable income. Since during the inflation phase these stocks act as heaven due to their secure phase. Because the bluechip companies offer security during periods of downturn. Due to their intelligent management teams, dedicated team and also the ability to generate stable profits.
What is Bluechip Stocks?
First of all Bluechip stocks simply means those stocks which have high reputable, basically the large cap companies which are financially sound. Such type of stocks have track record of offering higher returns. In addition to this, these stocks are the market leaders of the respective sector or industries.
Advantage of Investing in Bluechip Stocks –
- The Bluechip stocks are backed up by a strong business model.
- The Bluechip stocks offer consistent dividend.
- All these companies are well regulated and governed.
- Such companies are debt free and are cash rich.
- Such type of stocks are less volatile.
- These companies are reliable and are safe stock.
- Such stocks offer you steady and long term returns.
Disadvantage of Investing in Bluechip Stocks –
- Bluechip stocks might give you lower returns in comparison to other stocks.
- Such companies are not a multi-bagger.
- These types of stocks are usually impacted by stock market crash.
- The cost involved in buying this stock is usually higher.
- Companies are usually conservative in exploring new opportunities.
Should You Invest in Bluechip Stocks in India?
Its time for me to answer the biggest question that should you invest in Bluechip stocks in India. As after reading the article by now you must be thinking are bluechip stocks are than better any other stock option. Well if you ask me then my answer is Yes. So while investing for long term you must consider investing in bluechip stocks. But it does not mean that you should only invest in bluechip stock.
Well an ideal portfolio is the one which is a perfect blend of bluechip stocks, small cap stocks and large cap stocks. But for beginners my suggestion would be to start invest in bluechip stocks.