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Strategy
No. 5:
Buy Blue Chip Stocks to Hold in the Long Term
One strategy that has
proven its value over time is to be a long-term holder
of major growth stocks as these types of companies have
proven their ability to deliver superior performance
over the medium to long term. Again, this requires
regular scrutiny of the market. The most common term for
these stocks is 'blue chip'.
Although blue chip
companies have a history of regularly returning solid
profits and dividends, don't be misled into believing
they are immune to economic downturns. They're not.
However, they are usually large enough to weather an
economic battering better than smaller companies.
Companies that fall into the category of blue chip
stocks include Telstra, National Australia Bank, Coles
Myer and Westfield Holdings.
Whatever portfolio mix
you are considering, you should include some blue chip
stocks. The proportion you choose will depend on the
type of mix you are after.
Next:
Buy Emerging Growth Stocks
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