Bluechip stocks are companies that have a long term reputation in the market. These companies have a strong history of having competitive advantage, have deep moats and often pay hefty dividends.
That is why, having a bluechip stock in your portfolio is like creating an anchor that will stop your portfolio from sinking into losses amid high tides of volatility.
There are two ways to invest in bluechip stocks:
To find a bluechip stock, one should look out for a company with the following characteristics:
Now that we have reviewed some key steps to select the right stocks, here’s a list of don’ts that could help you avoid dud stocks.
By virtue of their size, conspicuous media presence and relative transparency of financial transactions, bluechip stocks are safer than midcap stocks or and smallcap stocks.
One common misunderstanding among investors is that the stocks present in Nifty and Sensex automatically categorize as bluechips and you can choose from those without having to worry.
That, however, is not entirely true. Buying the best bluechip stocks does NOT necessarily mean picking a few from the Sensex or Nifty.
Since you’re interested in bluechip stocks, we recommend you take a look at Tanushree Banerjee’s safe stocks recommendation service StockSelect.
Also check out our guide on how to buy the best bluechip stocks in India.
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