5 Top Blue Chip Stocks to Buy Now
In investing, everyone wants big rewards with low risk. Blue chip stocks seek to offer that powerful combination through the companies that have established themselves as the leaders of some of the most profitable industries in the global economy. Because of their dominance of their respective industry niches, blue chip stocks tend to have competitive advantages that can feed into further growth opportunities. Yet most blue chip stocks have long enough histories that they've established their ability to survive through good times and bad, avoiding the flameouts that weaker rivals often end up succumbing to before falling out of the limelight.
Not everyone agrees on the exact definition of a blue chip stock. Some delegate the responsibility of establishing which stocks qualify as blue chips to S&P Dow Jones Indices, which is responsible for coming up with the 30 stocks that make up the Dow Jones Industrial Average (DJINDICES: ^DJI). It's certainly the case that just about every Dow component has worked hard to gain admission to the venerable stock market benchmark, and the list includes the leaders of many prominent industries. Because of that fact, you'll find members of the Dow Jones Industrial Average among the five blue chip stocks discussed below.
However, by nature of the methodology that S&P Dow Jones Indices uses to select Dow components, the average will inevitably leave out some of the most prominent, highest-quality businesses on the planet. If you want the best of the best in blue chip stocks, it's worth going outside the Dow to consider some other leaders in their fields with strong prospects for growth extending well into the future.
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