what is the nifty fifty 
the nifty fifty was a group of 50 large cap stocks on the new york stock exchange that were most favored by institutional investors in the 1960s and 1970s investment in these top 50 stocks similar to blue chip stocks of today is said to have propelled the american economy to its bull market of the 1970s companies in this group were usually characterized by consistent earnings growth and high p e ratios understanding the nifty fiftythe nifty fifty stocks got their notoriety in the bull markets of the 1960s and early 1970s they became known as one decision stocks because investors were told by individuals such as university of pennsylvania professor jeremy siegel that they could buy and hold them forever that wasn t always the case though no one comprehensive list exists of the nifty fifty examples of some of these stocks include general electric ge coca cola ko and ibm ibm however part of this list included companies that have been troubled in the last decade such as xerox and polaroid the nifty fifty should not be confused with the cnx nifty 50 the latter is an indian stock exchange index that covers 13 sectors of the nation s economy nifty fifty stocks and price to earnings p e ratioshistorically nifty fifty stocks were favored in part due to their high price to earnings or p e ratios p e ratios compare a stock s current market value price to its earnings per share earnings are the company s net profits which the ceo and investor relations team announce each quarter on the company s earnings conference call the p e ratio indicates the dollar amount an investor should invest in a company to receive one dollar of that company s earnings the p e is thus sometimes referred to as the price multiple today high p e ratios such as with many technology companies i e tesla s tsla forward p e of 1 076 can indicate volatility and a lack of stability if the company s price is significantly higher than its actual concrete earnings this imbalance could suggest investors have over hyped the company if the company fails to generate profits investors who have purchased the stock at a high valuation could see their holdings decline if the market catches on and prices drop accordingly nifty fifty and today s blue chip stockstoday s blue chip stocks in several ways resemble the nifty fifty stocks of prior decades blue chip stocks are nationally recognized well established and financially sound companies such as coca cola disney pepsico wal mart general electric ibm and mcdonald s dominant in their respective industries many of these names overlap with those in the nifty fifty blue chip stocks represent highly reputable brands and have survived multiple downturns in the economy over the years investors with a low risk profile i e more conservative or potentially older investors nearing retirement and looking for stability often place their assets in blue chip stocks these are excellent options for capital preservation steady dividend payments provide a stream of income if the investor does not have a salary and also protects the portfolio against inflation 