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The term "blue chip" comes from the game of poker, where a blue chip holds the highest value. Blue-chip stocks are considered high-valued, supreme long-term investment vehicles. Historically, they have shown to generate growth in long-term portfolios. Blue-chip stocks are stocks of well-known and well-established companies. Blue-chip stocks have several characteristics that benefit investors in the long-run.

The majority of investors know blue-chip stocks have stable earnings. During an economic downturn, investors may turn to these safe havens because of their secure nature. Blue-chip companies offer security during periods of slowed growth due to their intelligent management teams and ability to generate stable profits. If the stock market is experiencing a bear market, investors don't need to worry about their investments in blue-chips because, generally, they recover. JPMorgan Chase provides a good example with its recovery from the 2007-2008 financial crisis.

Many blue-chip stocks, historically, pay out dividends to their shareholders. Since blue-chip stocks do not move much in price, they offer dividends to make up for it. Blue-chip stocks have shown that, generally, they make increased and uninterrupted dividend payments over time. In the long-run, an investor can benefit from dividend payments and generate portfolio income. The dividend payments help to protect against the adverse affects of inflation.

Blue chips have strong balance sheets and cash flows, strong business models and strong, consistent growth. Many investors consider blue-chip stocks to be secure investments. Long-term investors can look for their investments in blue-chip stocks to grow steadily over time and to receive dividend payments.

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