What are Blue chips?

By the name of blue chips, it refers to the stocks of financially sound corporations, with a good track record, that have a reputation for quality, profitability and reliability.

The market value of these companies usually exceeds 1.000 billion. They are known companies, at least, among the three most important in their sector; and, frequently, the leader. They are part of the most popular indices. For example, the industrial Dow Jones.

The origin of the term blue chips comes from poker in which blue chips are the most valuable. From there, go to bag, to indicate high-priced securities, giving rise to the concept of first-rate stocks, or high-value properties.

In short, these are well-established companies, whose values ​​do not fluctuate greatly. They have a stable income and liquidity. They do not need to be financed with debt and have a high market capitalization.

In the case of the Ibex 35, there are also examples of blue chips. Among them, large financial entities, companies related to energy or the media, among others, are represented. Although the top blue chips of the Ibex 35 vary, from year to year, in general some examples can be mentioned, such as: Telefónica, Inditex, Banco de Santander, BBVA, Iberdrola, Aena, Gas Natural Caixa Bank, IAG, ArcelorMittal, Ferrovial ...

What are the advantages of blue chips?

When the investor decides to bet on this type of actionsIt does so mainly because of its great liquidity. Which is based on the volume of capitalization bursátil and negotiation of this type of securities. For this reason, they are often considered a low risk investment, compared to other types of stocks.

Therefore, taking into account the convenience of the investor having a diversified portfolio, but without assuming too many risks, blue chips are a good option.

It should be noted that when a crisis arises, these types of securities tend to perform better than the rest. Maintaining its stability and liquidity. It can be said, in these cases, that they pull the index.

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