In Poker and the Stock Market, Blue Chips are Gold

Celebrating NAHREP familia, cultura, politics, and grassroots action

January 13, 2022

Qué onda mi gente?!

We haven’t done any wonky terms of the week in a while. So, in light of it still being January, the month of the year when we are still gung-ho about self-improvement, I thought we would focus on our financial health and the power of stock market investments.

NAHREP 10 Principle #5:

If you read the State of Hispanic Wealth Report, you’ll see that Latinos are driving homeownership growth and are increasingly becoming real estate investors. However, Latinos are less diversified in their assets today than they were prior to the housing crash! We still continue to put all of our eggs in the real estate market. While that’s awesome given the strength of housing market, we’re not guaranteed that it will be strong forever. An enormous amount of wealth was made in 2020 and 2021 through the stock market. In 2019, for example, the S&P 500 had a 31.5% return and in 2020 an 18.4% return on investment. However, Latinos are still the least likely to invest in the stock market compared to any other demographic. Nos da miedo.

Well, it’s time we leveled up and got smart about asset diversification. Blue-chip stocks are a good place to start!

So, what is a Blue-Chip Stock?

If you play poker, it’s exactly what it sounds like. In poker, blue chips are the chips with the highest value. In the same way, blue-chip stocks are the stocks with the highest value. These are usually huge companies that are household names, with an excellent reputation. Think of companies like Amazon, Apple, or Target. They’re not new companies and they’ve been around forever. They’re the types of stocks you keep and hold and see them grow in value over time. It’s the Warren Buffett strategy and there’s a reason why they call him the Oracle of Wall Street. These are safe investments, won’t have huge peaks or huge dips, and they fare better than other stocks in an economic crisis.

List of blue-chip stocks

This isn’t a comprehensive list. These are some companies you might recognize to give a you a taste of “blue-chip” stocks:

• Amazon
• American Express
• Apple
• Bank of America
• Clorox
• Coca-Cola
• Costco
• Disney
• Goldman Sachs
• Google
• Home Depot
• IBM
• Johnson & Johnson
• McDonald’s
• Microsoft
• Nike
• Starbucks
• Verizon
• Visa
• Walmart

Did you know that in the Survey of Consumer Finances, the main survey used to track Latino household wealth, the number of Latinos who invest in the stock market is so small that the sample size is not even listed? If you want to get in on the action, and don’t know where to start, blue chips are a good idea!

Un abrazo,

Noe