Blue-chip stocks

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Blue chip stocks are stocks of well-established, stable companies thought to be in excellent financial shape. Blue chips generally pay dividends and are favorably regarded by investors. The 30 companies that make up the Dow Jones Industrial Average are some of the bluest of blue chip stocks. A few examples of blue chips are Wal-Mart, Coca-Cola, Gillette, Berkshire Hathaway and Exxon-Mobile. [1]

The term "blue chip" is derived from poker, since the poker chip with the highest value is blue. [2]

Terms often used in conjunction with blue chip include "bellwether" and "large cap." Bellwether is a term used to describe a company that is recognized as the leader in its industry. For example, Microsoft would be considered a bellwether stock for computer software. [3]

References

  1. What is a Blue Chip Stock?. About.com.
  2. Blue Chip Stocks. Dogsofthedow.com.
  3. Blue Chip Stocks. money-zine.com.