Random Finance Tip #2
This post is sort of inspired by the Blue Chip stock entry by my friend Robin, of FortuneWatch.com.
I left a comment on it, and I thought I reproduce it here.
Without further ado, the second tip of this series is
“In times of sudden crisis, buy blue chip stocks”
Just in case you are wondering what the heck are blue chip stocks, let me first clarify. Nope they are not potato chips that are blue in color (Sounds yucky to me).
Blue chip companies are generally defined as big, safe, fundamentally strong companies with a market capitalization in excess of billions.
Blue chip stocks are good if you want to add some balance and diversification into your portfolio, but don’t expect any extraordinary gains. They are as safe (some people say boring which is a good thing actually) as can be. If you are looking for wild fluctuations, gyrations and excitement, you gotta look elsewhere.
So why buy in times of sudden crisis?
By sudden crisis, I mean a terrorist attack like 9/11, tsunami or hurricane devastation, death of a leading political figure or outbreak of disease like bird flu or SARS.
