Do Blue Chip Companies Exist Anymore?
There are some companies that either always do well or people always regard them as a foolproof way to invest money. These are what is known as “blue chip” companies. However, with the likes of Marks and Spencer losing money and previously enormous brands like Blockbuster no longer existing it does beg the question- is there really such a thing as a blue chip company anymore?
How we define them
Essentially a blue chip company is one that sells or produces something we all need or want on a regular basis – these can include big name brand items (McDonalds, Coca-Cola, Nike) as well as functional things we need every day (vehicles, building materials and so forth).
However, in recent times these companies have had to deal with changing times, for example Kodak found it very difficult to adapt as people moved away from taking pictures on film. Blockbuster suffered as a combination of cheaper DVDs, ordering services and on-demand services such as Netflix effectively made what they had to offer redundant.
Traditionally services such as insurance would be seen as fairly solid as people always needed them and therefore would tend to stick with them. However, in recent times the rise of price comparison sites has meant that customers are more aware of the options available to them and there is less loyalty to the brand as there would have been in recent years.
What seems to be the case is that it is becoming harder to find certainties in the market. This is especially the case with technology based companies as they develop at an alarming rate. Many high profile investors (including the likes of Rupert Murdoch and ITV) have suffered due to investing in the wrong online platforms at the wrong time.
This does not necessarily mean that blue chip companies are extinct and there are still some reliable investments that will result in solid returns. However, it is important to be vigilant – what seems to be the case is that the rapid changes in technology coupled with events such as Brexit have meant that previous certainties are not as certain as they were even five years ago.
This is not to be defeatist as equally investment opportunities can exist that were not available before, while the rise in crowdfunding has helped people get projects off the ground that were not possible before.
Essentially though one piece of advice has to remain constant, that it is better to have a portfolio of investments that spread the risk rather than to rely on one particular stock, account or pension. This will help to reduce any impact a major loss could potentially have.
At Larcomes Financial Services we believe in being “big enough to specialise but small enough to care.” This means that while we have the resources you need to get the most from your investment we also have the experience and customer care to work with you and find the ideal investments to suit your circumstances. For more information or to talk to a specialist please contact us today and we will be happy to discuss your needs in more detail.