What is Blue Chip Stocks? How to invest in a blue chip company?

What is Blue Chip Stocks: In the last one or two years, the number of people investing in the stock market has been increasing due to new discount brokers coming in and low brokerage charges and it has become a preferred source of income for risk-seeking people|

But Stock Market have many different types of shares in which investing is very highrisk| While some shares have a lower risk due to Low Volatility, they also yield less profit|

Now the best option left for Retail Investors is Blue Chip Stocks. In this post we will show you what blue chip stocks are and how this stock has become very important as per the requirement of the market at present, as well as how you can also invest in these stocks|

Contents 

👉What is Blue Chip Stocks?

👉Why is Blue Chip Stocks important?

👉How to calculate blue chip stocks?

👉India's Top 10 Blue Chip StocksHow to invest in Blue Chip Stocks?

👉Blue Chip Stocks Vs Penny StocksConclusion (Summery)

 
What is Blue Chip Stocks?

Blue Chip Stocks is shares issued by a company that is large in size, well-steeled and economically strong|Their Market Capitalization is also very large and generally the company is the main Leader of its sector| For example – Reliance Industries Limited, HDFC Bank, Asian Paints and Tata Steel.

Blue chip companies are very popular in the market which are trusted by investors as well as known for Consistance Dividend and Stable Return|

Why are these stocks called blue chip stocks?

There is an interesting story behind this, after the end of World War I'st, people's thinking changed considerably and sports like poker became very popular|The blue chips used in poker games were the most precious, so keeping these chips in mind, a journalist working in a US newspaper first used the term to share some of america's largest companies, and since then the word has become very popular|

Why is Blue Chip Stocks important?

As we told you earlier Blue Chip Stocks stocks of some of the most prestigious and best companies in our area| Many things make such stocks important –

In such stocks, you get a Stable return, as the volatility of the company's stock is low because of its high market cape|

Since blue chip stocks are very stockholders in the market, their shares have more liquidity, which easily leads to Buyer and Seller|

Stable return on equity (ROE), high price to earning (PE) etc. are also better than ordinary Companies|

This sector is also a leader, so whenever there is growth in the sector, these companies see the highest growth|

👉Some disadvantages of investing in Blue Chip Stocks!

Investing in blue chip stocks can also cause losses, as no stock is a continuous blue chip|

For example – after the arrival of Jio, the stock of the Airtel company was removed from the blue chip, as its investors were suffering due to the reduction in the number of Users, although it is currently put back in the blue chip|

How to calculate blue chip stocks?

Many investors want to invest in blue chip stocks, but they don't know any easy way to find such stocks| 

To calculate blue chip stocks you can keep these things in mind:- The market cap of the company should be more than Rs 1 lakh crore| 

Because the big market helps in fighting the slowdown in cape trade, which will not affect the dividendyou get much.The Price to Earning Ratio (PE) of the Blue Chip stock you purchased should be more than 15|

The company should be the leader of its sector or one of the top 3 companies|

At the same time, the company's Revenue, Sales and Net Profit need to increase steadily|

[Note: You can take the help of Screener in finding blue chip stocks| ]Based on all these parameters, you can Compare companies with different Blue Chip stocks and choose any one or two companies based on your budget and investment.

India's Top 10 Blue Chip Stocks

STOCKS NAME	MARKET CAP (INR)

RIL	1433447
TCS	1129323
INFOSYS	569974
HDFC	451894
BHARTI AIRTEL	288796
ITC	255946
ASIAN PAINTS	228371
MARUTI SUZUKI	219418
WIPRO	217414
ADANI GREEN	187277

👉Is it beneficial to invest in Blue Chip Stocks?

Yes! If you have a good amount of amount to invest in the stock market, invest in Blue Chip stocks inorder to not adopt Day-Trading, although you will get less profit, but the chances of making a profit are 99% and you will suffer very rarely|

How to invest in Blue Chip Stocks?

To invest in blue chip stocks, you need to follow a simple process –

1. First of all you need to open a demat account of yours| We would advise you to open your trading account on Zerodha as there are very few Brokrage Charge involved|

2. Determine any Stock of Blue Chip companies you have selected based on your research|

3. Then you can invest a certain amount every month by SIP in the Kite app of Zerodha|

4. For which you have to go to the Orders and click on the > SIP and > New SIP Create|

5. You can SIP Create a maximum of 20, Schedules Investment as well as Invest, Withdraw, and Transfer systematically|

6. You can then keep a constant watch on your purchased stock and sell it when you get the prescribed profit|

(Note:- We never advise you to invest by asking for loans or borrowings from other people, as the stock market is a business where both profits and losses are very likely| 

Blue Chip Stocks Vs Penny Stocks

Now understand the difference between blue chip stocks and penny stocks –

Blue Chip Stocks – It is a reliable and popular company with a huge market cap and also good financial data| You can see them as a high rated Brands in a Market that provides a stable return| Big investors prefer blue chip stocks more for Intraday Trading and Long Term Investment| 

Penny Stocks - Based on the market price, it is a very small company with a huge Growth potential| But at the same time, they have a lot of Volatility, which is why they High Risky, in which all the money invested can sink| Mainly Retail investors show their interest in it|

Conclusion :

 Thus we know what Blue Chip Stocks are and what causes blue chip stocks to be considered as the first choice of big investors|I hope this post will help you understand blue chip companies| 

Comment Box, you must tell which company you are planning to invest in or in which stock you have invested|

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About

Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you

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