Investing has become more and more complicated. It used to be you could buy stock in a blue chip company, stick it in a drawer, and wait until it grew. Times they are a changing. Blue chip companies are quickly becoming has-beens. Disruptive technology rules the day.
What are blue chip companies? They are nationally recognized, well-established, and financially sound businesses. Generally, they sell high-quality, widely accepted products and services. It’s believed their size and financial backing allows them to weather economic downturns and display stable, reliable growth.
For example, General Motors (GM) used to be a blue chip company. In the 50s and 60s their sales surpassed the Gross Domestic Product (GDP) of every country but one – the United States. The, buying stock in GM was a no brainer. Would you make that same purchase today?
Disruptive technology is the result of innovation. It transforms industries and makes current products obsolete. Business which are satisfied with operating at today’s standards won’t see many tomorrows. Coming out of the Great Recession, it’s companies like Audio Control which succeed. “Changes are almost month to month. We have to be making our products obsolete ourselves. Not letting our competitors make them obsolete,” said Tom Walker, CEO of Audio Control on About Money.
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