Blue chips are the stocks that, according to the financial market, are safer and have a good reputation and financial condition in the sector. It is not an official index, but a set of indicators that make investors direct their resources with much less risk associated with losses and losses.
Chips in the gaming world – like those popular in casinos – are the currency. It is through it and its respective values that we exchange our money and then we exchange the chips (or tokens) for the corresponding amount also in cash.
However, the blue chips index it has nothing to do with poker, roulette and nothing like casinos.
However, for investors, it is the one that comes closest to a risk-free bet and high chance of winning.
If you want to know a little more about what blue chips are and find out how to value more and more the types of investments made, take the opportunity to continue reading this post and learn all about blue chip stocks!
What is blue chips?
Blue chips are the most secure stocks, which have a good reputation and the best financial condition in the industry.
Blue chip stocks encourage investors to target their resources with much less associated risks.
However, the concept of blue chips is an unofficial assessment.
There is no official blue chip index for the stock market, but rather characteristics that tend to make an investor or stockbroker to recognize, quickly, what are the blue chip stocks.
Below, you will better understand some of the characteristics of blue chips:
- shares with greater liquidity, with some of the securities most traded on the stock exchange;
- are actions from large companies and traditional in their respective sectors of activity;
- high value market;
- growth solid and continuous;
- positive corporate governance;
- also positive relationship with shareholders;
- normally with a high volume of negotiations.
For that, the blue chip index can be quickly formulated based on the most traded shares on the stock exchange. Pay attention, only, to research this information in more than one trading session to be able to diagnose which are the actions that linger on top for longer. These are the blue chips.
Are you starting to invest in stocks? Then check out the video below.
How important is this index?
The blue chip index can be used, albeit informally, as benchmark for stock performance in the financial market in general.
It turns out that, in recent years, blue chips have shown to be associated with the Bovespa Index (or IBOV) because that is where the most traded shares on the Stock Exchange are concentrated.
As Ibovespa is one of the most used thermometers by the financial market in the country, it is easier to diagnose and monitor blue chips in this context.
Do you want to know more about Ibovespa? So read also, “What is Ibovespa and what is its impact on investment in shares”.
On what blue chips are, specifically, it is worth highlighting their relevance with base on origin them itself.
As we said earlier, they tend to be the darlings of investors because they belong to organizations that are already consolidated in the market and with greater strength in relation to other actions.
The risks, therefore, are lower and the volume of negotiations tends to be higher. This appreciation already gives a greater interest to investors.
The point of attention, however, lies in the fact that the informality that blue chips represent in the financial market.
Per not be an official index, it is important not to take the information as rules, but guidelines a moment in the industry for you to make the most assertive decision according to your information, objectives and needs.
Are there any other stock classifications?
Commonly used in the financial market, the ratings of certain stocks allow a more accurate assessment of the assertiveness of your investments. And there are two types besides the blue chips that we have mentioned so far:
The name is associated with the term of medium capitalization. Here, medium-sized companies are classified and translate, on average, because they are not the most valued shares, but neither, those with lower income.
For many, in fact, mid-caps offer more chances of growth than blue chips themselves, for example.
In turn, these are the shares with the lowest capitalization. They are affordable, financially, and have less liquidity compared to mid-caps and blue chips.
As you may have noticed, both mid-caps and small-caps are actions that arouse investors' interest.
The first because it allows greater growth margin and the second, because it is accessible, even though the risks are more present due to the volatility of the sector and other factors.
Therefore, even if you keep an eye on the blue chips, the other actions cannot be completely neglected from your attention and interest in valuing your equity and future investments.
What are the blue chip stocks in the country?
Brazil has some companies that already fit in the context of a blue chip index. They are large, solid corporations with high investments constantly heating up the financial market.
Next, we will highlight some of them based on the past few years and monitored by industry experts. Check out what they are:
- Petrobras, whose acronym for its shares is classified as PETR3 and PETR4;
- Vale, the world leader in the production of iron ore and other elements, such as nickel, and with broad interest in the Chinese market – its acronym in the stock market is VALE3 and VALE5;
- Usiminas, which appreciated 111% in 2017 and has received constant attention from investors since then, with steel representing the raw material of the steel company.
There are also other organizations that are inserted in the national market, but are based in other countries, such as the United States. Some of the most famous companies are:
- Procter & Gamble,
- Johnson & Johnson, among others.
How to choose the best blue chip stocks?
Finally, it is worthwhile to stay on top of some basic guidelines for you who were interested in blue chips and in the representatives in actions that help to valorize the market.
In general, we believe it is important to:
- O national market does not have many guarantees of profitability, as well as the risks are higher. Therefore, only invest in the sector if you have the necessary knowledge and professional assistance for this;
- study the financial market before investing in stocks. Start with low-risk or affordable investments to get a feel for the sector's volatility and also the associated risks and losses;
- follow market news and begin to identify patterns, changes and opportunities;
- if you go to the stock market, don't bet on blue chips, just. Diversify your investment portfolio.
Read too: Investment portfolio management: how and why to do it?
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