Low volatility: Beta is a metric that measures a stock's volatility compared to the volatility of the overall market.Blue chips tend to be older companies in less growth-focused industries, although this rule has plenty of exceptions.

The stocks in the Dow are blue chips in the most robust sense, many of which have 50 or more years of business success.

History of success: One of the reasons the Dow Jones remains a heavily-tracked index is its focus on blue-chip stocks.Blue chips usually trade millions of shares daily. One of the main benefits for institutional investors is the ability to buy large blocks of stock without paying high transaction fees. Blue chip stocks should be easy to find and not have high bid/ask spreads. Easy to trade: Liquidity is another common feature of blue-chip companies.Small and mid-cap companies usually aren't considered blue chips a market cap of $10 billion or more is a common cutoff point. Large market cap: A blue-chip company doesn't necessarily need to be a $500 billion behemoth, but having a large market capitalization figure is essential for stability and accessibility.While there are no rigid criteria on what makes a company a blue chip, they all share a few common characteristics: But when most investors talk about blue-chip companies, they reference large-cap American stocks. Experts often call the DJIA the 'blue-chip index' because it tracks a relatively small swath of the market but contains 30 large-cap blue-chip companies from various sectors and industries.īlue-chip firms can be found in different industries and fields, both domestically and abroad. You're likely familiar with the Dow Jones Industrial Average (DJIA), the oldest of the three major indices used to track the performance of the U.S. Blue chip firms are industry leaders recognized for their staying power, long-term profitability and ability to weather market downturns and recessions. Like a poker player who wants to collect as many blue casino chips as possible, an investor looking for long-term gains will fill a portfolio with blue-chip companies. The term 'blue-chip stocks' entered market vocabulary in the 1920s thanks to investment writer Oliver Gingold, who worked at the predecessor to the Dow Jones company. On the other hand, blue is the color casinos most frequently reserve for their highest-value chips, so the term floated into popular culture to describe assets of the highest value and quality. Traditionally, white and red casino chips are the most common and carry the lowest values. So, what are blue chips, anyway? If you've ever played table games like poker or blackjack at a casino, you likely noticed the different colors assigned to chips.

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