Should you buy and hold blue-chip stocks?
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Should you buy and hold blue-chip stocks?

3 Jan
3 Jan

Buying and holding blue-chip companies have long been a favourite strategy for many Hong Kong investors. 

Companies such as HSBC, Tencent, Hong Kong Stock Exchange are household names, besides stable financial performance, investors are also lured by their dividend payouts offered by many blue chip stocks. 

Despite its popularity, is buying and holding blue-chip stocks a winning investment strategy? Let us explore further, but first let’s understand what a blue chip stock is.

What are blue chip stocks?

Blue chip stocks are shares of large, reputable companies, generally with large market capitalisations and history of sound financial performance. 

The origin of “blue chip” stocks came from the game of poker, where blue chips have the highest value and are considered most attractive to players.

Let's take a look back at the largest companies in the world for the last four decades

It didn’t feel too long ago when some of us declared we will never swap for a touchscreen phone and swore allegiance. Or Nokia before that. 

And now, as we enter 2024, smartphones have become an inseparable part of our lives. What we consider “normal” changes quickly.

Blue chip stocks’ business dominance are usually demonstrated by their large market caps. But let’s take a look at how the ranks of the largest public companies in the world have changed through time. 

Two interesting observations:

  • Only two companies (Exxon and Microsoft) have managed to stay on the list for three decades. ExxonMobil was likely only able to stay on the list through its record-breaking US$78 billion merger with Mobil in 1998.
  • Once off the list, it is unlikely that a company will get back on. This might just be random but is clearly evident by looking back at the last four decades. It could also be structural in that big companies can, at a point, be dragged down by being too big. More research must be done on this observation.

Interestingly, we can draw similar parallels in the Hong Kong stock market, where only two companies have stayed on for the past 15 years:

So the conclusion is,  whether you are a US investor or Hong Kong investor, who bought the top 10 largest blue-chip companies from a decade ago and had held onto them — you might find to be left with quite a few not so blue-chip stocks in your portfolio now.

Propelled by our curiosity, greed, and desire to improve, humans are constantly competing and innovating.

Don't get left behind.

If you think you can guess what the list of top companies by market cap will look like at the end of 2029 and 2039, we wish you good luck.

We won't make that call, because very likely many of these companies on the list are not yet in existence (even as a dream).

The power of diversification 

Instead of just picking a few stocks, our advice to clients is always to build a well-diversified investment portfolio, to ensure its resilience. As the founder of Vanguard, Jack Bogle famously said, “Don’t look for the needle, buy the haystack”. 

Looking back at the list of largest public companies in history, there are familiar names such as Nokia, Cisco, and Alibaba, which once dominated in their respective realms but have since encountered difficulties in sustaining such dominance. 

The bankruptcies of General Motors, Lehman Brothers, and closer to home, Evergrande, once the largest Chinese real estate developer are also stark reminders that even the best companies may fail at times of stress.

Dividends paid out by blue chip stocks are also not a guarantee — some of us might still remember shares of HSBC (stock darling for many Hong Kong retail investors) plunged 9.5% on 1 April 2020 when the company had to suspend dividend payments as ordered by the UK regulator.

Building diversified portfolios at your fingertips with Endowus

The Endowus Investment Office has curated a suite of model portfolios for clients to create diversified, resilient portfolios on your fingertips across various core and satellite themes. 

You can also select from over 200+ Best-In-Class Funds from global asset managers such as Blackrock, Fidelity, PIMCO, and more, at the lowest achievable costs with no subscription fees and 100% trailer fees rebate to our clients.

Click here to get started on your wealth journey with Endowus today.


Risk Warnings

Investment involves risk. Past performance is not an indicator nor a guarantee of future performance. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Rates of exchange may cause the value of investments to go up or down. 

This article is not intended to be relied upon as a forecast or research or investment advice, and should not form the basis of any investment or other decisions. The information contained herein is not intended, and should not be construed, as any legal, tax, regulatory, accounting or financial advice. If you would like investment, accounting, tax or legal advice, you should consult with your own professional advisors regarding your individual circumstances and needs.

The information in this article may not be suitable for all investors. You are responsible for any action that you take or decision that you make in reliance on any content in this article, and you agree that Endowus HK Limited (“Endowus”) is not liable under any circumstances.

No invitation or solicitation

Neither the information, nor any opinion, contained in this article constitutes a recommendation, offer or solicitation  by Endowus or its affiliates to you to buy or sell any securities, collective investment schemes or other financial instruments or services, nor shall any such security, collective investment scheme, or other financial instruments or services be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction. 

This is not intended to be an invitation or offer made to the public to subscribe for any financial product or to enter into any transaction.

Accuracy of Information

Whilst Endowus has made reasonable efforts to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or errors in any such information. Endowus does not warrant or represent that the information in this article is correct, accurate or reliable. 


Any opinion or estimate above is made on a general basis and none of Endowus, nor any of its affiliates, representatives or agents have given any consideration to nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Opinions expressed herein are subject to change without notice.  

Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this article are subject to market influences and contingent upon matters outside the control of Endowus and therefore may not be realised in the future. 

In presenting the information above, none of Endowus, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances.

This article has not been reviewed by the Securities and Futures Commission of Hong Kong.

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