ANSWERS: 1
  • <h4 class="dechead">On One Hand: Relative Safety

    Bluechip stocks are theoretically the safest stocks on the market. Bluechip stocks represent large, well established companies that are thought to have very high potential for long-term success in their sector. Additionally, these stocks often pay regular dividends to shareholders.

    On the Other: The Element of Risk

    Although bluechip stocks are generally safer than other investment options such as penny stocks, no stock is completely risk-free. Even well-established companies can suffer losses resulting from large changes in market trends, depressions and credit problems. There is also the possibility of a company being taken down from the inside because of dishonest accounting practices or fraud.

    Bottom Line

    All stock investment involves some element of risk. Keeping this fact in mind, bluechip stocks represent companies that generally have the lowest chance of failing. Of all the stocks one could invest in, bluechips are among the safest.

    Source:

    Investopedia: Blue-Chip Stock

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