Diversification is an important component of any long-term investment strategy. Blue-chip stocks can provide a solid foundation for an investment portfolio, but most financial advisers advise investors to diversify their portfolio with various asset classes, even after retirement. Small-cap and mid-cap stocks may have greater growth potential. Investors may also want to hold bonds, cash, or other assets.
Blue-chip stocks may fall or remain flat during a period when small-cap stocks, foreign-company stocks, or bonds are rising.