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Investing in blue chip companies will gain more profit to the investor or not?


if it so, minimum how much the investor should invest and how long the investor should wait? blue chip companies in the sense companies like infosys, reliance, ongc etc.

Blue chips are the best options to invest in but they key is to make the investment when they are just starting out. Eg: Rs. 1000/- in 1997 put in Infosys would have earned you Rs. 13,000,000 by now in terms of dividend, stock splits, bonus shares, etc.
So search for emerging companies with market potential and in this globalised scenario focus on export oriented firms in fields like textiles, IT, etc.

read some tips and articles on investing on this site

Blue chip companies are the large cap stocks that are found in
list like the Fortune 500 or S&P 500. They are well established companies with many resources that they can devote to improving their business and usually have a long track record of
revenues and earnings. These things make them more stable
than the smaller, newer companies and thus make people more comfortable in investing in them.

However, when looking for the best performing (stock price appreciation) companies, usually these are the smaller companies that are growing fast. These companies are often found in the Russell 2000 list. Over the years, the smaller companies have outperformed the blue chips. However, the there are times when the opposite is true and blue chips are the top performers. Also, many of the blue chips also pay out dividends that add to their total return while very few of the small companies pay dividends.

You can buy the blue chips in an index mutual fund that mirrors the performance of the s&P 500 or an exchange traded fund like SPY.
The small caps are also available in index funds that track the Russell 2000 or an exchange traded fund like IWN.

How much to invest and for how long will depend on your available resources, your time horizon and your tolerance for risk.

Blue chip companies do not give u more profits but they do give u good profits with good safety level. If u need more profits u have to look into Midcaps (medium risk) or Small caps (Higher risk). Remember one thing :
The more the risk u take, the more the profits. It is for the other side too. After the May melt down a good amt of Mid cap stocks are available in the market which are under valued. Look for them. Do some analysis .. Look for IPO s.
For further queries Mail me at mikaarun@yahoo.com

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