A blue-chip index is an index that tracks shares of the well-known and financially stable publicly traded companies known as blue chips. Blue-chip stocks represent companies that provide investors with consistent returns, making them desirable investments. Blue-chip companies are considered a gauge of the relative strength of an industry or economy. A blue-chip index is a bellwether, meaning news reports and analysts tend to emphasize the performance of major blue-chip stock indexes, such as the S&P 500 and Dow Jones Industrial Average each day.The blue-chip index seeks to gain exposure to a variety of stable stocks by purchasing shares of an exchange-traded fund or index fund, rather than selecting individual stocks. Besides the DIJA and S&P 500, other examples of blue-chip indexes include the New Europe Blue Chip Index which tracks 30 of the top stocks traded in central, eastern and southeastern Europe, and the DAX Index, which tracks the top 30 companies on the Frankfurt Stock Exchange.The term blue chip originates from the game of poker, where the highest denominated chip is coloured blue. While there is no universal definition of what makes up a blue-chip company, there are several qualities each company shares.Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.

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