{"id":17569,"date":"2021-11-18T12:41:44","date_gmt":"2021-11-18T07:11:44","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=17569"},"modified":"2026-05-27T18:01:10","modified_gmt":"2026-05-27T12:31:10","slug":"how-to-invest-in-blue-chip-stocks","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/how-to-invest-in-blue-chip-stocks\/","title":{"rendered":"How to Invest in Resilient Large-Cap and Blue-Chip Stocks Wisely"},"content":{"rendered":"

Quality First<\/strong><\/span> \u2013 if you live by this principle, then investing in Blue-chip stocks will come naturally to you. Some of the most successful investors in the stock market have amassed huge wealth by investing in quality stocks and then holding on to those investments. However, the temptations in the market are great, and even seasoned investors keep wondering what they are missing out on.<\/p>\n

If you really want your investments to enable you to reach your financial goals<\/a><\/strong> and create wealth, you need to master the art of investing in blue-chip, quality large-cap stocks and allocate a portion of your portfolio towards this.<\/p>\n

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It\u2019s understandable if you are excited by the bull market<\/a><\/strong> and the rapid price rise in some of the other stocks. By all means, invest in them and see if it works for you. After all, in investing unlike life, you need not think \u2018either-or\u2019.\u00a0 Maybe some other style of investing will work for you, but investing in quality large-cap, blue-chip stocks will definitely work wonders for you, albeit it may take some time before you can see it.<\/p>\n

In this piece, we will help you do just that.<\/p>\n

Blue-chip stocks<\/h2>\n

Let\u2019s start by broadly defining what blue-chip stocks<\/em> are and how you can identify them. Although the term \u2018blue-chip\u2019 originated in 1920, even a century later, it\u2019s still used commonly by investors while refer to high-quality stocks. Blue-chip stocks are offered by companies that are financially stable, established, and have a reputation for reliability. These companies have a solid track record of sustainable performance and a business model that has endured previous market upheavals and can continue to do so in the future. They are usually market leaders in their respective industries, and their consistent profitable growth leads to a market cap that puts them in the large-cap league.\u00a0 Think Nestle<\/a>, TCS<\/a>, HDFC<\/a>, Asian Paints<\/a>, Infosys<\/a>, etc.<\/p>\n

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As you can see in the above chart, the returns of these companies were pretty stable and sustainable. The returns delivered by them have been more than the Fixed Deposit returns 81% of the time in the last 16 years.<\/p>\n

Core stocks are a selective set of stocks from the large-cap space. The below chart shows the returns of MoneyWorks4me Core stocks<\/strong><\/a> versus the average large-cap companies.<\/p>\n

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In terms of growth in valuation, blue-chip stocks being larger companies grow slowly compared to smaller companies but they grow consistently and profitably. They provide inflation-beating returns<\/a><\/strong>, even in the most dynamic and turbulent market conditions, as seen in the above charts.<\/p>\n

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How to Invest in Blue-chip Stocks<\/h2>\n

Of course, if something is of high quality, it can\u2019t be available for cheap! By the same logic, blue-chip stocks are often expensive to buy (though not as expensive as some of the recent IPO stocks<\/a><\/strong>). This is one of the biggest discouraging factors for investors who don\u2019t want to park a major portion of their surplus buying shares that are expensive. The possible \u2018slow\u2019 growth of blue-chip stocks also takes the excitement out of investing, not something that active investors prefer. In contrast, this can turn into a \u2018boring\u2019 investment activity.<\/p>\n

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. -Paul Samuelson<\/em><\/p><\/blockquote>\n

But if you can follow a process of regularly investing a portion of your surplus, say 50% in quality large-cap, blue-chip stocks, over time, you can build a robust portfolio that has stability, excitement, and high returns. Here\u2019s how you can go about it:<\/p>\n

Shortlist & Research:<\/h3>\n

Start by creating a shortlist of companies that have been consistently strong performers in the market. You can use a stock screener tool<\/strong><\/a> to do the initial filtering of large companies. Key parameters that you should be focusing on while shortlisting are:<\/p>\n