During these tumultuous times when the markets are frequently fluctuating, most investors like to play it safe by staying out of the market for a while until the scenario improves. Though this is a good option in terms of investment security staying long out of the market is not advisable. Rather than avoiding the market during these times, an investor should use this opportunity to accumulate those blue chip shares which will save him on a rainy day.
A blue chip is a share or stock in a company that has national reputation for being able to operate with unswerving steadfastness in both good and bad times. They will usually be the leading companies in their individual fields. Investing in these kinds of shares during unstable market periods could not only ensure that an investor is able to ride out the storm but also of consistent returns in the future. An example for these kinds of shares can be Microsoft, Wipro etc. Though blue chips also have a certain risk associated with it, it is significantly less than the others on the market. These shares are known for their less risk nature, solid dividends and reliable background. Though there is a distinct possibility that they might not make as much money as the mid-cap shares it will most probably be worth the investment.
Even though this is the case, constant and continuous changes in the market can slowly and surely bring down a market leader. So keeping up with the market changes to realize where the blue chips of the company will stand in the next five years is very important.