Blue-Chip Index

A Blue-Chip Index is a stock market index that tracks the performance of the largest and most financially stable companies, known as blue-chip stocks, in a given market. These companies are typically well-established, have a strong track record of performance, and are leaders in their respective industries. Blue-chip indices, such as the Dow Jones Industrial Average (DJIA) or the FTSE 100, are often used as benchmarks to gauge the overall health and performance of the stock market. Because they include reliable and financially strong companies, these indices are considered relatively stable and are often favored by conservative investors.

Example

The Dow Jones Industrial Average (DJIA) is a well-known blue-chip index that includes 30 major U.S. companies like Apple, Microsoft, and Coca-Cola, representing a broad spectrum of industries.