Why You Should Have Blue-chip Stocks in Your Portfolio?

Your portfolio would be incomplete without blue-chip stocks. It’s vital to have blue-chip stocks in your portfolio. But before we dive into that, let’s have a quick overview of blue-chip stocks.

Blue-chip stocks are shares of long-standing companies that are well established, big, financially stable, leaders in their sector, and well-known. Like blue chips in poker games, from which the name is derived, blue-chip companies are highly valued.

What are  Blue-Chip Stocks?

Blue-chip stocks should be a part of your well-diversified portfolio. Naturally, they are more expensive but are totally worth it in the long run. Here are some reasons why.

Why You Should Have Blue-chip Stocks in Your Portfolio

Your primary concern as a dividend investor is the safety of your dividends. That is, you continue to steadily receive your share of the company’s earnings. Because if the company stops paying dividends, then you cease to be a dividend investor. Dividends are part of a company’s profit distributed to shareholders as quarterly payments.

1. Safe Dividends

2. High Returns on Investment

Historically, blue-chip stocks have performed better than the general stock market, which averages 8% to 10% return. Blue-chip stocks can return up to 12% when you ideally reinvest your dividends. It’s best you automatically reinvest your dividend and returns. 

Blue-chip stocks tend to be safe harbor stocks. They are less volatile than penny stocks and smaller companies’ stocks and are also likely to rebound faster after a market downturn.

3. Safe Harbor Stocks

Blue-chip stocks are popular, recognizable brand names. This means you can get regular updates on the companies’ progress through mainstream media. You’ll be on top of your stock investments without putting in the extra effort to monitor the markets.

4. Brand Recognition

Blue-chip stocks are some of the most liquid investments in the world. You can trade them at a moment’s notice and through various brokers, fund managers, or online platforms.

5. Liquidity and Ease of Access

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