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Blue Chip Stocks

Blue Chip Stocks

If you’re looking for information about blue chip stocks’ definition or a list of them in India then you’ve come to the right site. But first let’s read about blue chip stocks.

What Is Blue Chip Stocks?

A large business with a great reputation is referred as a blue chip stock. These are frequently very sizable, well-respected, financially stable businesses that have been in operation for a long time, have consistent earnings, and frequently distribute dividends to investors. A blue chip stock normally has a market valuation of billions, is typically the market leader or one of the top three corporations in its industry, and is almost always a well-known brand. Blue chip stocks are among the most often purchased by investors for each of the aforementioned reasons.

Characteristics of Blue Chip Stocks

Regular Dividends are Offered by Blue Chip Companies

Blue chip firms regularly distribute quarterly or annual dividends to their shareholders. Even though they might not always pay dividends, they might occasionally do so in order to fund the company’s expansion or growth instead of reducing the dividend payout. They reward the shareholders for their investments and faith in them by paying dividends from the profit they had achieved.

Blue Chip Stocks Provide Consistent Returns

Long-term and cautious investors favour blue chip stocks since they are the most dependable when it comes to solid returns. Blue chip stocks offer stable returns and comparatively lower returns than other equities, even though they may not offer as large of a return as small- and mid-cap enterprises.

Blue Chip Shares High Market Capitalization

A blue chip stock has a market value of more than 20,000 crores, making them pricey due to their high valuation. The State Bank of India, Bharti Airtel, Tata Consultancy Services, Reliance Industries, Coal India, HDFC, ITC, Infosys, ICICI Bank, ONGC, GAIL, and Sun Pharma are among India’s top blue chip firms based on market value.

The best stocks to buy for the long term are blue chip stocks

Blue chip firms are better investments if you have a longer time horizon since they grow slowly but steadily over time. For their retirement funds to generate a sizable return, investors would desire to include blue chip firms in their portfolios.

Blue Chip Businesses are Experienced Management

Management is the backbone of every business and is essential to the development and operation of a corporation. The board of directors, CFO, and CEO of blue-chip businesses are well-known for their industry knowledge and extensive experience.

Blue Chip Stocks Possess Relatively Fewer Risks

Due to their strong financial standing, superior management, and reduced debt, blue chip stocks are often less risky than mid-cap and small-cap stocks. Blue chip firms are typically debt-free or have reduced debt because they always have the money to pay off their debt, so they only have a limited impact during market volatility or market corrections.

Benefits of Investing in Indian Blue Chip Stocks

  • Low returns: Blue chip firms have been around for a while and have already grown to their full potential. Therefore, while stock prices won’t increase exponentially in the near future, they will deliver exceptional returns over the course of years or decades.
  • Costly: Due to their strong market position and the rarity of blue chip companies with low P/E ratios, blue chip stocks are generally more expensive than other types of securities. As a result, blue chip stock share prices can be prohibitive for novice investors.
  • Growth: Blue chip corporations might not expand as quickly as comparable small- and mid-cap firms. They occasionally offer a lower return than the benchmark index.

Top Blue Chip Stock List India

Company NameMarket CapCMP ( 9/09/2022)
Tata Consultancy Services Ltd.11.59 Trillion3,149
Reliance industries Ltd.17.51 Trillion2,581
HDFC Bank Ltd.8.33 Trillion1,482
Infosys Ltd.6.19Trillion1,457
ITC Ltd.4.09 Trillion326
Coal India Ltd.1.46 Trillion238
Hindustan Unilever Ltd.6.05 Trillion2,564
Wipro Ltd.2.26 Trillion407
Asian Paints Ltd.3.31 Trillion3,400
Maruti Suzuki India Ltd.2.66 Trillion8,784

Disclaimer: The stocks mentioned are illustrative and not suggested. Future returns cannot be predicted by past results.

How Can You Invest in Top Blue Chip Companies in India in 2022? 

To begin investing, you must first register a Demat account with a cheap broker or full-service broker. Once your account has been activated, you have two options for making investments: either directly in India’s top blue chip stocks or through a mutual fund. If you want to invest in blue chip stocks through a mutual fund, you can look for a fund that invests in blue chip firms. If you want to invest directly in blue chip stocks, you must conduct adequate research and analysis.

How Do I Choose the Best Blue Chip Stocks?

Even if the greatest blue chip firms in India are regarded as having strong fundamentals, investors should conduct their own analysis and research before putting their hard-earned money into these stocks. A blue chip stock cannot be purchased by an investor for its posh brand name or exceptional dividends. Without thorough investigation and analysis, investing might result in significant losses.

risk and return In Blue Chip Investment

In the short term, blue-chip investments have low risk but little return. Blue-chip stocks ought to be the foundation of your portfolio, but they shouldn’t be your only source of funding. Depending on your level of risk tolerance, you want to also invest in a few mid- and small-cap equities.

Rich retirees and experienced investors favour blue-chip companies, but most novice investors choose to avoid them. The rationale for this is that while low short-term returns are not appealing to investors wanting to earn rapid money, pensioners, for whom the security of their cash is considerably more essential, will benefit greatly from these investments due to their low risk. Similar to this, investors who may not need to access their money right away find long-term possibilities appealing.

Blue-chip stocks’ safety

Always keep in mind that a prior performance is not a guarantee of future success. You should diversify your investments to lessen the chance of losing all of your money in a downturn since even the finest companies can fail.

Key Things To Keep In Mind :

Don’t abruptly go over your investment budget

Although long-term investments are undoubtedly superior to other types of investments, you shouldn’t overspend your investment budget hastily. Instead, pick a specific sum and spread it among several reputable stocks. Spend your money evenly across several high-performing stocks and shares rather than just one stock.

Take Care When Following Hot Tips

No matter how reliable the source, never take a stock marketing suggestion at face value without doing your own in-depth study. Always choose your stocks after thorough investigation and evaluation of the firms’ and their employees’ performance. While some advice may prove to be of great value to you, the incorrect advice may swiftly put you into danger.

Remove losing stocks from your portfolio

A stock’s eventual recovery after a steep decline cannot be predicted at all. Recognize that it is crucial to be realistic about what is achievable and what is not in the stock market. Therefore, admit your error and sell the underperforming stock as soon as you realise it is part of your portfolio to stop additional losses.

Thank You For Reading !

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