Final answer:
The notion that blue chip stocks are too speculative for most investors is false. Blue chip stocks are shares of large, established companies with a history of stability and dividend payments, making them lower risk investments compared to others.
Step-by-step explanation:
The statement that a blue chip stock is too speculative for most investors is False. Blue chip stocks refer to shares in large, well-established companies known for their financial stability, solid earnings, and reliability. These companies often have a long track record of paying dividends and are considered lower risk compared to stocks of smaller or less-established companies. While it is certainly possible for any stock to be speculative if approached with that intention, most investors consider blue chip stocks as safer investments.
It's important to note that even though blue chip stocks are generally considered less risky, all stock investments carry some risk, and past performance is not indicative of future results. Choosing stocks that will outperform the market is challenging, and as highlighted, many mutual funds fail to do so. Therefore, it's often recommended that individuals save money early and invest in a diversified portfolio for long-term wealth accumulation.