If you know anything about stocks, then you may already know that all stocks do not occupy the same position. There are stocks known as blue chips and these are what discerning investors should aspire to invest in.

For the purpose of clarity, blue chips are stocks that have the qualities below:

They are stocks of reputable companies that have been around for a while.

Blue chip stocks are usually very much in demand because the corporations behind such stocks make money, pay dividends and deliver great results annually.

Naturally, with such great qualities, it makes a lot of sense for you to seek out and invest in blue chip stocks. One other quality of the corporations behind blue chip stocks is the fact that such companies usually have a great management team. Bill gates, for instance, may give up his position at Microsoft but that would not have any adverse effect on Microsoft stocks. Why? The reason is simple there is a chain of command in place and those that run the affairs of Microsoft can be trusted to do a good job there.

So, if you want to invest in blue chip stocks, what should be your 'modus operandi', as it were? How exactly do you go about investing in blue chip stocks?

You simply keep your eyes wide open and apply the tips below judiciously.

1) Buy Public Offers:

Actually, the stocks of blue chip companies don't often come to the market by way of public offers. But any time they do, be sure to seize the opportunity and invest in blue chip stocks. Your return on investment will be well worth your while.

2) Buy From the Secondary Market:

As a shrewd investor, you should not wait a public offer. Simply go to the secondary market and you will get blue chip stocks. Buy at the right price and hold on to the stocks for a while. After some time you can sell the stock, and benefit from capital appreciation. You could also hold on to the stocks as part of a great stock portfolio.

3) Take Up Rights Issue:

If you are an existing shareholder already, you should always take up the viable option of rights issue. This is actually an honor to you as the blue chip out fit has recognized you as a special person. You deserve to have more stocks each time there is a 'rights issue' because a blue chip stock is not an all comers affair.

4) Invest Your Dividends:

If you already own blue chip stocks, chances are you are receiving dividends or even bonus shares from your stocks. This is where you need to show how smart you are. Don't even bother to cash your dividend checks. Have an arrangement with your stock broker to always re-invest your dividends in the same dividend-paying blue chip stocks. This is a great way of consolidating your holdings. After a while, you will notice - to your delightful surprise - that you have built up a great deal of near liquid assets.

Finally, understand clearly that blue chip stocks are special. Investing in the stock market is a great idea. But if you invest in blue chips, your money will really begin to breed.

Learn more about this author, Emmanuel Osondu.
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