Blue Chips

Definition: Blue chip stocks are stocks of well-established companies.  These would be companies like Wal-Mart, McDonald's, and Gillette.  Investments in these stocks are typically considered more conservative.  They got their name from the blue chip in poker, which is considered the most expensive chip.

TeenAnalyst Advice: Blue chips are good stocks to get started out with because we all know what these companies are and who their customers are.Every diversified portfolio should contain at least a few blue chip stocks in it.  The majority of these stocks will still be around 30 years from now, as compared to smaller companies whose futures are unknown.

Jonny Boy said:

Jodi - here is what I have from college notes - are you cool with this definition - A blue chip is stock available from a large, national or international company that has solid track record of earnings that are stable and/or dividend growth that is solid and stable with a reputation of having a high quality management team and/or products. For the most part, to be a blue chip company you must have anything that is of very high quality, with is perceived to drive the stock and dividends upward and because investors desire investments in this type of company, it becomes very stable. The company's reputation and standards are everything when it comes to attracting investors.