A blue chip stock is a stock issued by a large, well-established, financially-sound company with an excellent reputation. These companies are industry leaders that have stood the test of time and are respected by their customers and shareholders. The term "blue chip" comes from the card game poker, where the simplest sets of poker chips include white, red, and blue chips, with American tradition dictating that the blues are highest in value). Blue chip stocks are popular among investors for their reliability, though they are not immune to market downturns.

Here are some characteristics of blue chip stocks:

• Large market capitalization: Blue-chip stocks are often large-cap stocks, which typically means they have a market valuation of $10 billion or more.
• Growth history: Blue-chips have a reliable, solid history of sustained growth and good future prospects.
• Dividends: Blue chip stocks usually pay dividends to shareholders and have regular increases to their payouts.

Blue chip stocks can play an important role in a portfolio. They provide a useful combination of growth and value characteristics that can balance the ups and downs caused by economic distress and market volatility. However, whether or not blue chip stocks (or any other securities) represent a good investment depends on an investors financial needs, investment objectives, diversification goals, risk tolerance, and investment style.

Some examples of blue chip stocks include Apple, Coca-Cola, Johnson & Johnson, and Walmart.