Blue Chip Stocks

In poker, the blue chips on the table have the highest value. In the stock market, blue chip refers to companies who are considered leaders in their industries and show promises of long-term success. Blue chip companies and their stock are well-established, provide a long history of the growth, have a good reputation for dividend payout, have good quality, and usually have a very recognizable brand. In fact, these companies are the standard by which other firms in the field are judged. These companies are included in the Dow Jones industrial average, which is an index of only 30 companies that are the key leaders in their industries. IBM, McDonald's, Coca-Cola, and others are blue-chip companies you have likely heard of. If you want stocks that grow fairly readily, bear relative low risk in the long term, and pay moderate dividends, blue-chip stocks are likely for you. While these are not a deal -- the stocks tend to be the most expensive -- over years they can produce a lovely profit.

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Technology Stocks

Technology stocks are stocks bought from companies that are involved in the high technology sector. For example, when you buy stock from computer or software providers or manufacturers, you are buying technology or tech stocks. Unfortunately, the term is rather vague. Some investors use the term technology stocks to refer to telecommunication stocks and biotechnology stocks, while others do not.

Speculative Stocks

Speculative stocks are the riskier stocks that come from companies that are listed on the NASDAQ. There are far fewer speculative stocks on the Dow Jones or other indexes. These stocks often offer a greater chance for higher profit, but also pose a greater risk. They may also be hard to predict. These stocks are generally good only for aggressive and very confident investors who do not mind facing significant losses.

Low-Risk, Mid-Risk, and High- Risk Stocks

Some investors refer to stocks in terms of risk. The evaluations of low-risk, mid-risk and high-risk are far from precise - what one investor seeks as risky another investor may see as only somewhat risky. In general, though, penny and speculative stocks fall into the high risk category, while stocks from banks and some utilities fall into the low risk category. Those stocks which have a good history of dividend payout may be considered medium risk.

Knowing about the different types of stocks available shows you that you have many options when it comes to investing. Rather than thinking of stocks as something monolithic, you should consider all the types of stocks and select those that best meet your goals and your investment.

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