Build a Low-Risk Portfolio with Blue-Chip Shares in Australia

Blue-chip shares are typically large companies with well-established reputations and dependable earnings. Investors often consider these shares to be secure assets, which is why blue-chip stocks constitute a crucial sector of the stock exchange around the world.

Blue-chip shares can help investors diversify their portfolios, reducing the risk of losses. These stocks have a proven history of steady growth and staying power.

What are Blue-Chip Shares?

Blue-chip shares are the stocks of renowned, financially stable, and well-established businesses that have stood the test of time and are valued by their consumers and stakeholders. These stocks are the market’s most significant and most promising equities. Investors consider these businesses the best of the best, like a casino’s most expensive (blue) chips.

Over the years, blue-chip companies have shown to have excellent financial strength and stability, such as low or modest debt and a strong credit rating. Due to their secure market position, blue-chip stocks help generate decent cash flow for investors and show strong profit growth. They are likely to continue to grow revenues in the future.

How to Buy Blue-Chip Shares in Australia

If you’re interested in buying any of these blue-chip shares in Australia, you can purchase them individually with the help of a broker or an online share-trading platform. However, keep in mind that you’ll have to pay a trading fee (typically up to $30 per trade) to use platforms.

Another option is to invest in an Exchange Traded Fund (ETF). ETFs are pooled investment products intended to track an index through a meticulously selected portfolio of securities. Some popular ETF providers in Australia are BetaShares Capital, iShares, eInvest, and Fidelity International.

FAQs About Blue-Chip Shares

1. What are blue-chip companies?

Blue-chip companies have solid business models and remarkable revenue records for investors. These revenues often include regular and increasing dividend payments, which make blue-chip shares quite popular among even the most conservative investors.

However, more and more risk-tolerant investors are also considering investing in blue-chip shares to diversify their portfolios better and have some stability during volatile stock market conditions. That’s because blue-chip companies have many strategic advantages that empower them to acquire their competitors during a recession and make revenues from collaborations that small businesses may not achieve.

2. How can I buy blue-chip shares in Australia?

You can buy blue-chip shares by using an online trading platform or hiring a full-service broker. Alternatively, you can invest in an ETF.

3. How are blue-chip shares different from regular shares?

Here are some of the characteristics that differentiate blue-chip stocks from regular stocks:

• Blue-chip companies are leaders in their industry with high cash reserves and strong credit ratings.

• They have large market capitalisation, which gives them a financial edge through cheaper debt or equity.

• They are established and highly reliable businesses with solid financial prospects.

• They have a competitive and steady business model and an exceptional record of producing good cash flows and revenues for investors.

• They have an extensive track record of delivering long-term earnings growth and paying stable or increasing dividends.

Trade Blue-Chip Stocks Like a Pro

Blue chips stocks are important bedrocks of investment portfolios of all kinds. These stocks represent financial stability, long-term growth, a strong track record, and even prestige. If you’re looking to invest in any of these blue-chip shares in Australia, moomoo can help.

Our one-stop trading app for new and seasoned investors gives you free access to all Australian blue-chip stocks. You can track your investments with AI-based alerts and trade securely on any device. We provide free 24/7 global news to help investors check the latest market trends. We also offer online educational courses to improve your trading skills.

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