Investment Profile: Blue Chips

If you can’t beat ‘em, join ‘em, the saying goes. It’s very difficult for the average investor to do better than the overall market. In fact, most people who try to beat the market do much worse than those who just try to match the market. Plus, while past performance doesn’t predict future results, broad market indexes like the S&P 500 have grown as much as 10% a year on average over the long term.

So, how do you try to match the market? If you’re a bajillionaire, you could just buy every stock. For the rest of us, there are funds like Blue Chips that let you buy a little bit of stock in several hundred of the biggest companies in the US.

blue chips

What is this investment all about?

Big companies may not always grow the fastest, but they offer some important advantages. They tend to be more reliable, since they’ve established solid reputations with customers and suppliers. Also, they tend to pay more dividends than smaller companies.

The term ‘Blue Chips’ means companies that are big, well known, well-established, and financially sound. That’s why we nicknamed this investment Blue Chips. It’s actually an Exchange Traded Fund (ETF) called Vanguard Mega Cap ETF. As of this writing, it includes 70% of the biggest companies based in the United States.

What companies does this investment include?

Blue Chips currently has exposure to 277 companies in various industries including technology, finance, health care, consumer services, consumer products, energy, telecom, etc. Its largest holdings are companies like Apple, Alphabet, Microsoft, Exxon Mobil, General Electric, Johnson & Johnson, Facebook, AT&T, and Amazon. Heard of them? We thought so…and for good reason.

Who is this investment for?

Blue Chips is a great investment choice for people who want to diversify exposure across many of the largest, most stable companies in the US. It can be a good, solid foundation for your portfolio – something you can invest in now, and keep adding to on a regular basis over the long term.

Why did it make the cut on Stash?

U.S. News ranked it as one of the best investments in its class, with “Excellent” ratings for fees and diversification, and Morningstar gives it their top score of five stars. It has a low, 0.09% expense ratio. The company behind the fund is Vanguard, which manages over $3 trillion in assets, and is the second largest provider of ETFs.

What are some other Stash investments like this one?

If you are looking to diversify your overall portfolio, here are some other Stash investments to consider:

  • The Mixes — a broad combination of global stocks, bonds and cash
  • Delicious Dividends — companies that have historically issued many dividends

 







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