Blue-Chip Stocks

A blue-chip stock is a share of a large, well-established, financially sound company with a long track record of reliable performance. These companies are typically leaders in their industries and often pay steady dividends. The name comes from the highest-value chips in poker.

Investors use blue chips as stable, lower-risk core holdings that can anchor a portfolio. They tend to weather downturns better than smaller, riskier companies and often provide dependable dividends. The trade-off is slower growth, so many investors pair blue chips with some higher-growth names for balance.

Large, household-name companies with decades of profits and dividends are classic blue chips. An investor might hold several across different sectors as a steady foundation, then add a few smaller growth stocks for extra upside potential.