Companies represented by blue chip stocks are typically of high quality with a long history of stable earnings. The publicly traded shares often represent well-known name brands run by high quality management teams that often pay dividends to their shareholders.
Some long-term investors view these companies as being of lower risk when compared to newer fad stocks that have yet to prove themselves fiscally.
The bottom line is that blue chips stocks are typically a good investment. But how do you choose the best ones to invest in? Here are 3 steps you can use as a guide.