CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing all your money. Read our full Risk Warning.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Based on your current location/IP address, you will be provided services by Fortrade Cyprus. 76% of retail CFD client accounts lose money

What Are Blue Chip Stocks and Why Are They Popular?

Blue chip stocks are well-established stocks from companies that have a long history of stable earnings and growth. Read to learn more about them.

Filip Dimkovski - Writer for Fortrade
By Filip Dimkovski
Joel Taylor - Editor for Fortrade
Edited by Joel Taylor

Published November 13, 2023.

The term blue chip has been around for ages and is primarily used to describe stocks that have proven reliable and stable investments. Generally, these are large companies with market capitalizations of more than $10 billion and a long history of consistent financial performance.

Some of the blue chip stocks include:

  • Microsoft
  • Apple
  • Johnson & Johnson
  • JPMorgan Chase
  • Coca-Cola
  • ExxonMobil

Namely, these companies have well-diversified businesses across multiple industries.

Features of Blue Chip Companies

  • Established and well-known Blue chip companies tend to be household names due to their size and longevity in the market.
  • Large market capitalization These companies usually have large market caps, giving them financial stability and reducing risks for stockholders.
  • Lower volatility Due to their size and diversified businesses, blue chip stocks are less prone to price fluctuations than smaller stocks.
  • Long-term growth potential With well-established products and services, blue chip companies could be attractive to those looking for potential long-term gains.
  • Consistent dividend payments Many blue chip stocks provide consistent dividend payments to shareholders. 

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  • Reduced agility Due to their size and complexity, large companies tend to move slower than smaller ones, making them less able to respond quickly to changing market conditions.
  • Lower returns than mid and small-cap stocks Although they could offer stability, blue chip stocks generally provide lower returns compared to those from smaller companies.
  • Obsolescence risk As technology advances rapidly, companies that do not adapt can be left behind, decreasing their share value.

» Learn the fundamentals of CFD stock trading

Are Blue Chip Stocks a Good Investment?

Blue chip stocks could be an attractive investment possibility for beginners or investors seeking growth potential. Their large market caps, low volatility, and consistency make them popular among investors.

There's no guarantee when it comes to investing in the stock market, and blue chip stocks do carry certain risks such as reduced agility, relatively lower potential returns, and obsolescence risk. If you do intend to look at blue chip stocks, be sure to consider the pros and cons and always have a backup plan before investing.

Note: Fortrade offers the ability to trade the price changes of stocks with CFDs and NOT to buy/sell ownership of stocks themselves