‘Sure things’ for the future
Blue-chip stocks have long been viewed as a sure bet for investors wanting to play it safe in the sharemarket. But as the economic impacts of Covid-19 reverberate through global sharemarkets, do blue chips still qualify as a safe investment?
For a label that’s bandied about as much as any other in the investing world, “blue chip” is without a common definition. As Jamie Nicol, chief investment officer and director at DNR Capital, points out, “the definition of ‘blue chip’ can be in the eye of the beholder”.
The term is derived from the game of poker, where the blue chips are traditionally the most valuable. For investors, it usually means companies that are best in class.
“The term in investment parlance conjures up characteristics such as being a market leader, immune to economic cycles, financially secure with a long track record of success,” says Max Cappetta, chief executive
