Is your portfolio ready for retirement? | Investor place
As our macro expert, Eric Fry, writes below, “Most of us freak out from time to time about securing a comfortable and financially healthy retirement.”
This is certainly true for me.
Part of the challenge is finding the balance between investing in a stock with the firepower to grow wealth and help achieve financial goals … without the stock being so volatile that it is impossible to sustain the stock. race.
This points us to something called “Forever Stocks”.
In Eric’s essay below, he begins a series aimed at helping you secure a financially healthy retirement. He delves into the subject of Forever Stocks, naming a handful and highlighting their ability to generate enormous wealth even during tough times in the market.
If retirement is on your radar, today’s essay is for you. I’ll let Eric take care of this.
Have a nice week end,
My Best Retirement Game: Forever Stocks
By Eric Fry
Most of us share a common concern. And it doesn’t matter what happens on Wall Street or Main Street or Washington DC. Most of us panic from time to time about securing a comfortable and financially healthy retirement.
Retirement has become a four-letter word in recent years, with pension cuts, weak employer promises to contribute to a 401 (k), and slow income growth. The generation of reliable “defined benefit” retirement benefits is coming to an end. The rest of us will have to bear the burden on our own, based on our own savings and investment plans.
For most people, the picture is not so pretty.
So today and in a Smart money in the near future, I want to present you with a solid plan to strengthen your retirement savings.
These are the types of stocks that you will want to consider buying and holding. And I think once I explain the logic behind these types of games, you’ll call your broker tomorrow morning.
Let’s start …
Buy good stocks at the worst time
You may have heard of this concept before: “Forever Stocks”.
These are stocks you own in good times and bad times, especially if they pay a steadily increasing dividend.
You should consider these investments as your main assets. Treat these Forever Stocks like your “Elite 8” or “Top 10” – or whatever number you choose. In my experience, eight to ten actions are ideal. In total, these stocks should represent around 25% to 35% of your total portfolio.
Long-term survival doesn’t just depend on strong defense; it also requires an effective offense. This is where Forever Stocks comes in.
Also, if we decide in advance that a small piece of our wallet remains sacrosanct, we can more easily adjust the rest of our holdings.
Before I get into what type of securities are Forever Stocks, I’ll show you why today – or any day – is a good time to buy them. To do this, let me share something that a wise old man once told me: “There is no wrong way to say, ‘I love you’.
Likewise, there is no wrong way to buy Forever Stock.
That said, timing is important in both love and finance. Saying “I love you” after stumbling drunk through the front door at 4 a.m. is less ideal than saying it through a candlelit table.
In finance, buying a good stock near a major peak is less ideal than buying it near a major low. But the investment gains that can come from buying a great stock at the worst possible time can be astounding.
Timing is important, but that’s not all. This is my point here.
Let’s take an example from the past …
When misery becomes delight
Imagine, for example, that you bought shares of Amazon.com Inc. (AMZN) on December 10, 1999, at the height of the Internet bubble… and has continued to hold these shares until today. This 22-year investment would have produced a total return of over 4,450.09%, or 19 times the return of the S&P 500 over that period.
But this delicious long-term result doesn’t reveal anything about the short-term pain you would have endured. Within two years of your purchase, Amazon shares would have fallen 95%. Nine years later, your stocks would still be down more than 50%.
But a decade after your investment, Amazon would have finally gone black… and then continued to soar from that point on.
Obviously, I chose this success story. But I might as well have chosen examples from my personal history. Many times my most remarkable investments have started badly …
In 1999, I produced an institutional research product in which I recommended buying shares of Royal Garden Resorts (now known as Minor International), a Thai hotel company.
Two years after I recommended it, the stock was down 37%. But I held on. And despite this dismal start, Royal Garden continued to post gains of:
- 100% after three years …
- 500% after six years …
- 1000% after seven years …
- 2000% after eight years …
- And 2.888% after nine years.
Also in 1999, I recommended buying shares of Adidas AG (ADDYY), the German sneaker manufacturer. It also dropped shortly after my recommendation. Two years later, the stock was still down 50%.
But after 18 years, the title had become a 10-bagger – up more than 1,000%. This result was six times better than what the S&P 500 provided over the same period.
In hindsight, I recommended these two actions at the “wrong time”. And yet, both continued to produce significant and above-market returns.
So if you have a good stock that is performing poorly, think twice before you hit the “eject” button.
Buying a good stock at the worst possible time can be one of the best investments you’ve ever made.
What Kind of Security is a Forever Stock?
I’m talking about dominant world-class companies like Amazon, Nike Inc. (NKE), Walmart Inc. (WMT), and Microsoft Corp. (MSFT).
While there is no fixed definition of a world class business, I believe they share at least four essential traits.
In a Smart money in the near future, I will outline these four traits. Plus, I’ll show you the “secret formula” that the world’s best investors use to find these stocks – and a “hidden advantage” of owning a world-class basket of stocks.
During this time, I recently posted a report presenting four of my main 5G actions.
Any of them has the potential to become a Forever Stock.
To find out how to get this report, Click here.
And I’ll see you here soon.