blue chip

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Blue Chip Stock

Stock in a well-known and highly respected publicly-traded company. Blue chip companies are usually financially sound and are thought to be relatively low-risk investments. They tend to be less volatile than other companies and to provide solid growth to portfolios. Examples in the United States include General Electric and Coca-Cola. Indices such as the Dow Jones Industrial Average tracks blue chip stocks.

blue chip

A very high quality investment involving a lower-than-average risk of loss of principal or reduction in income. The term is generally used to refer to securities of companies having a long history of sustained earnings and dividend payments.