Blue chip stocks are shares of large, well-established, and financially sound companies with a strong reputation and a history of dependable earnings. These companies are often leaders in their industries, widely recognized household names, and typically have a market capitalization of $10 billion or more

. Key characteristics of blue chip stocks include:

• Stability and financial strength, often with solid balance sheets, manageable debt, and strong profitability

• A long track record of consistent or growing dividends, though paying dividends is not strictly required to qualify as a blue chip

• Inclusion in major stock market indices such as the Dow Jones Industrial Average, S&P 500, Nasdaq-100, or similar indexes in other countries

• Lower volatility compared to smaller or less established companies, making them relatively safer investments

• High liquidity, meaning shares are frequently traded and easy to buy or sell

The term "blue chip" originates from poker, where blue chips have the highest value, symbolizing the high quality and value of these stocks

. Examples of blue chip companies include IBM, Coca-Cola, Microsoft, American Express, McDonald's, Walmart, and Chevron

. Investors often choose blue chip stocks for their reliability, steady growth, and dividend income, especially those with a lower risk tolerance or seeking long-term capital preservation

. They can be purchased individually or through mutual funds and ETFs focused on blue chip stocks

. In summary, blue chip stocks represent financially stable, reputable companies with a history of solid performance and are considered foundational investments in many portfolios.