What is purple chip?
This is a term used to describe instruments considered to be the best and safest of blue-chip stocks - ie the 'blue-chip royalty'. It usually refers to businesses with steady, long-term growth rather than short-term success.
Where have you heard about purple chip?
The term was made popular by John Schwinghamer, a porfolio manager who wrote the 2012 book 'Purple chips: winning in the stock market with the very best of the blue-chip stocks'.
What you need to know about purple chips.
Schwinghamer defined purple chip stocks as those of companies with a market capitalisation of more than £1billion. He also pointed investors towards those businesses that have produced strong performances for at least seven years. He believed that these established companies were more likely to survive market turbulence than those with dramatic, short-term successes. Schwinghamer's general approach was that steady, long-term gains combined with occasional losses are preferable to sudden sharp increases in profits.
Find out more about purple chip.
Purple chip stocks are considered to be the most stable type of blue-chip instruments.