Blue Chip Stocks
Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

The root of the term “blue chip” stems from the game of poker, as the blue chips represent the highest value. Investing in blue chip stocks can give you an additional measure of safety in today’s turbulent markets.

Pat McKeough believes investors will profit most, and with the least amount of risk, by putting the bulk of your stock portfolio in shares of blue chip companies—those that are well-established, with strong balance sheets and steady earnings and cash flow. These are companies that have bright prospects in healthy and growing industries.

The best blue chips offer both capital gains growth potential and regular dividend income. The dividend yield is certainly one of the most concrete indicators of a sound investment. It is the percentage you get when you divide the current yearly dividend payment by the share or unit price of the investment. It’s an indicator we pay especially close attention to when we select stocks to recommend in our investment newsletters.

We feel most investors should hold the largest part of their investment portfolios in securities from blue chip companies. All these stocks should offer good “value”—that is, they should trade at reasonable multiples of earnings, cash flow, book value and so on. Ideally, they should also have above average-growth prospects in expanding markets.

Meanwhile, when investing in any type of stock, at TSI Network we recommend using our three-part Successful Investor strategy:

1-Invest mainly in well-established companies;

2-Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);

3-Downplay or avoid stocks in the broker/media limelight.

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Blue Chip Stocks
Investor Toolkit: The role of small and large cap stocks in your portfolio
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “Successful investors own big and small companies.” Shares of large, well-established companies have rebounded well after the 2007-2009 market crisis. Investors sometimes refer to these companies as “large cap stocks.” That’s because they have a market “cap” (that’s short for “capitalization,” or total value of shares outstanding) of several billion dollars or more....
2 min read
Pat McKeough
Blue Chip Stocks
Insider trading and your blue chip stocks
Some investors have told us that they are pessimistic about the stock market because of lots of insider selling in the U.S. blue chip stocks they hold. The value of insider buying and selling as a market indicator seems self-evident. After all, company insiders — officers, directors, or owners of 10% or more of a company’s stock — are apt to know more than outsiders do about what’s going on in their businesses.

Insider trading: Not the conclusive indicator that many investors think it is

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2 min read
Pat McKeough
Blue Chip Stocks
BP oil spill could turn oil sands stocks into blue chip stocks
In response to the BP oil spill in the Gulf of Mexico, regulators will probably require offshore drillers to install more equipment aimed at preventing future spills. These extra costs would hurt the profits of companies that are active in the Gulf. That should spur more development of less-risky onshore oil and natural-gas deposits, particularly Canada’s oil sands.

Safety, falling costs could drive producers back to the land

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2 min read
Pat McKeough
Blue Chip Stocks
This large cap stock’s earnings have risen sharply
One key part of our three-pronged investing program is to spread your money out across the five main sectors of the economy: Manufacturing & Industry; Resources; Consumer; Finance; and Utilities. In general, stocks in the Resources and Manufacturing & Industry sectors expose you to above-average volatility, and stocks in the Utilities and Finance sectors entail below-average volatility. Consumer stocks usually fall in the middle. That’s because consumer firms benefit from continuous and often habitual use of their products and services, so they have much more stability in their sales and earnings, no matter what the economy is doing....
2 min read
Pat McKeough
Blue Chip Stocks
Blue chip stocks: Here’s a conservative way to profit from wireless growth
Demand for wireless services is rising sharply in North America. That’s partly because device makers continue to release new cellphones and wireless devices, such as Apple’s iPad and Amazon’s Kindle e-book reader. As well, more customers are switching from traditional phones (or land lines) to wireless services.

Tap into wireless growth with blue chip stocks that operate networks

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1 min read
Pat McKeough
Blue Chip Stocks
What investors can learn from this large cap stock’s troubles
To cut your investing risk, we recommend following our three-part system: Hold mostly high-quality, dividend-paying stocks, spread your money out across the five main economic sectors (Manufacturing & Industry; Resources; Consumer; Finance; Utilities) and avoid or downplay stocks in the broker/public relations limelight.

How “in-the-limelight” stocks can hurt your portfolio

Even well-established large cap stocks (or shares of larger-sized companies) can stumble. That’s especially true when they’re in what we call the broker/public relations limelight. Investors can build up unrealistic expectations when stocks spend time in that limelight. When broker/public-relations favourites fail to live up to those expectations, they drop much further than they would have if they had been less widely followed.

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2 min read
Pat McKeough
Blue Chip Stocks
Blue chip stocks: How to boost your 2010 returns with The Successful Investor’s #1 Stock Pick
On January 8 The Successful Investor will unveil a stock that’s primed for explosive growth in 2010. In fact, we think this blue chip stock’s prospects are so bright we’ve named it The Successful Investor’s #1 stock pick for the coming year. More on how you can get all the details on this exciting #1 pick in a moment, but first we’d like to share with you...

How we picked our #1 stock for 2010

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2 min read
Pat McKeough
Blue Chip Stocks
This blue chip stock’s prospects are bright
Blue chip stocks are well-established companies that have demonstrated their financial strength through good times and bad. They typically pay dividends, and are considered to be less risky, based on their historical patterns. There are many blue chip stocks in the consumer sector. Typically, the strongest of these companies sell staples, like soap, beverages and soup, that consumers must buy no matter what the economy is doing. Strong consumer blue chip stocks share a number of characteristics. These include geographic diversity (which helps protect them from regional economic problems), a record of rising cash flow and a strong balance sheet....
2 min read
Pat McKeough
Blue Chip Stocks
This large cap stock’s well positioned to profit from the amazing popularity of smartphones
Smartphones have become increasingly popular in recent years. Aside from functioning as mobile phones, these devices have many computer-like functions, including Internet access and email. The smartphone market is highly competitive. Two large cap stocks, Apple and Research in Motion, are the dominant players. However, other firms, such as Motorola, Palm and Garmin, have introduced new smartphones in recent months, as well.

Look to wireless carriers for smartphone profits

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1 min read
Pat McKeough
Blue Chip Stocks
This blue chip stock’s new gadget helps you lose money more slowly
We noted with interest (and some amusement) the unveiling of the prototype of “The Rationalizer,” a new device that aims to sense day traders’ stress levels and alert them when it may be time to step back from trading. The idea is to ensure that traders avoid the mistake of trading based on emotion. The device is made by Philips Electronics (symbol PHG on New York), one of the blue chip stocks we’ve taken a close look at in the most recent issue of Wall Street Stock Forecaster (see below for a full update on this Netherlands-based electronics firm). The Dialogues Incubator, an initiative of Dutch bank ABN AMRO, also played a role in its design. Users of the device wear an “Emo Bracelet,” which senses a trader’s stress level and makes the accompanying EmoBowl, which sits on the traders’ desk, change from yellow to red as the trader becomes more stressed....
2 min read
Pat McKeough
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