Tips & Hints on how to find blue chip stocks

Have you ever thought about stock market investing and considered how blue chip stocks  might help in attaining your ultimate goals financially? In the game of poker, the most valuable poker chips are the blue ones, which is where the term Blue chip stock got its name. When individuals invest in these valuable blue chip stocks, they are in fact investing in well established, reputable companies. These companies have minimal liabilities, stable earnings and high credit ratings.  Additionally, they have a well established customer base and wide ranging lines of product.

Blue chip stocks are considered quite stable, safe investments and that is their biggest advantage. Individuals are fairly sure of positive returns on their financial investments, when they procure stocks and shares in well established companies like Coca-Cola, Wal-Mart, Microsoft, Disney or McDonalds.  In the stock market, blue chip stocks are often thought of as a sure winner, a home run. Because of this, blue chip stocks are eagerly sought by non-profit organizations with small budgets and the need for safe financial risk, as well as retirees looking for conservative, solid investments in planning their future.

The biggest problem with purchasing blue chip stock, however, is of course, the high price per share. Small investors, therefore, have a more difficult time trying to base their portfolios on these desired blue chip stocks. Since the returns on these stocks are known to be relatively modest, individuals would not enjoy the thrill of being able to state that they were a part of the rise of some unknown organization to the top of that industry, nor would they have the opportunity to become overnight millionaires.

What are bellwether stocks

Sometimes, blue chip stocks are called bellwether stocks, even though they are not precisely the same and are not exchangeable. A company that is a leader in its industry and often used by analysts in determining or forecasting the performance of that industry, are referred to as bellwether stocks. As highly valued companies are usually industry leaders, bellwether stocks are usually blue chip stocks as well.  This does not, however, mean that a blue chip stock is a bellwether stock.

The most well known and established listing of blue chip stocks  in the world, is believed to be  the Dow Jones Industrial Average. It was created be Charles Dow, editor of the Wall Street Journal and the founder of Dow Jones & Company.  It is an index of 30 stocks used and quoted by analysts to provide a depiction of the overall performance of the stock market.

There are a number of ways for individuals to purchase shares and stocks if they wish to invest in blue chip stocks.  Some of these methods are through a stock broker, a direct purchase stock plan or a dividend reinvestment plan. Individuals could choose, instead, to invest their money in a mutual fund made up of numerous blue chip stocks which would lower their risk even more.

The tax breaks for a Roth IRA to that of a traditional IRA is different. A Roth IRA contribution is never deductible whereas a traditional IRA is deductible. As for example, if you are on a Roth IRA and have put $2,000, you’d still be taxed on $30,000. But at the time of withdrawing the money from a Roth IRA, none of it will be taxed. This is based on assumption that the Roth IRA has seen just five tax-years and while you have experienced more tax years than Roth.

The tax breaks for a traditional IRA are of the deductible kind. The money that you deposit in your IRA is not taxed. In traditional IRA whatever earnings you have on your contributions, they are not going to be taxed until you withdraw that money after some years. As for example, if you have made $30,000 during the year, and you have put $2,000 of it into an IRA, then you need to pay an income tax on $28,000 only. In addition to that, your deposit will grow free of tax over the years. And during the time of your retirement, when you would finally withdraw the money, after age 59 ½ only then the money will be taxed as income and that too at your ordinary income tax rate.

There are two major steps to financial planning and future investments. First is to source funding or investment capital and secondly where to place these funds. It has been increasingly difficult to access credit either as a small business or individual. The most important thing is to review your choices. As an individual a good place to start is Bad Credit Offers. Not specifically a source for credit offers to individuals with a low credit score.

Good investments such as in real estate require that you find home loans that are very cheap, by this we mean with a very low interest rate. Once there is a lower rate then the cost of funds is low. Once again the best place to find quickly and easily accessible loans is where bad credit offers exist. Bad credit home loans are good especially to someone that has good credit, accessing the funds are quick and easy.

Maximum number of market operations takes place by means of stock exchange nowadays. There are few simple steps that are executed while the stock is being bought or sold. The steps can be summarized in the following manner:

• You have to place your order with the stock broker, whatever you may wish to buy.
• The broker will then send the order to the required farm whose share you wish to buy.
• The order department then works out its turn and resends the respective exchange floor where the share is considered.
• The clerk then makes sure to give the order to the firm’s floor trader.
• It is the floor trader who actually moves out to find a specialist’s post for the respective company and also another floor trader who will sell his shares to the company.
• The traders have to negotiate on the price.
• The order is then carried out.
• The floor trader gives his report to the clerk and the order department.
• The order department verifies the negotiation with the agent.
• The dealer validates the trade with you.
• This is traditional stock exchange process. Nowadays you may log in to the stock exchange website and begin the process.

Like all investments, if you intend top borrow funds you must have a solid credit score. Once you can access your credit score then investing with borrowed funds in mutual funds, stocks and bonds are relatively easy.

Credit cards are an extremely bad investment in the USA in 2008 for both small businesses and everyday consumers. There is a simple reason behind this. These two target markets are the life blood of credit card issuers. However during 2007 and in early 2008 the tell tale signs of the Dow Jones Stock Market winding down will impact heavily on these players.

The Dow Jones Index is indicating that the US is quickly reaching recession levels as companies lose profitability. However the average person has little or no idea what this will mean. The most devastating effect of a recession is unemployment levels. Non-Farm Payrolls (nonfarm payrolls) have been on the decline over the last year and this means that employment levels are falling and this can lead to one damaging effect.

With high unemployment levels come reduced family or household incomes. This means that less money to spend and greater demand on credit facilities in order to meet the basic amenities of every day life. This means that if you did apply for a credit card in 2007 or early 2008 then it’s not a good idea to activate that card.

As someone in your immediate or extended family/household could be in need of some additional resources in the near future due to unemployment the cash that you might spend to keep your credit in check might have to be used to assist a family member. This presents an immediate quagmire which all the fees attached such as late payment fees, cash advance fees, balance transfer fees, over the limit fees and others can inflate a credit card debt to unmanageable levels. Hence in order not to incur these fees you should avoid credit card debt at all costs.

Debt Managers will tell you that have 3 – 4 credit cards that you pay on time can really boost your credit score. However it’s best to use the bunker down strategy and pay off some of these cards and hold only one card during a recession. Otherwise you can attempt to get what is known as an interest free credit card.

These are credit cards with 0% interest in either the first six months or up to a year. These are really rewards for those with a high credit score as they are much less unlikely to become delinquent. The other interest free credit cards are to se such as prepaid credit cards like the Account Now credit card offer that reports to credit repositories even though it is a prepaid card.