The buy and hold investment can prepare you for a great retirement
It’s safe to say that stocks play a valuable role in investing for retirement, no matter how close to golden age you are. The stock markets can be one of the best tools for building wealth over time and growing a nest egg that will keep you comfortable late in life. While some people will be quick to mention the risks of investing, the truth is that the risk of missing out on the gains that the stock market has to offer year after year is of much more concern.
That said, investors considering retirement need to be extremely selective with which companies they will own over the long term. Choosing to invest in reliable companies with a history of rewarding long-term shareholders can lead to huge gains over the years, while too many volatile names can make investing and holding a business uncomfortable.
That’s why make a list of 3 stocks to buy and hold for retirement to help you get a feel for the types of businesses to look for. Let’s take a look further below.
One of the main pillars of investing for retirement is taking advantage of companies that pay dividends. This way, investors can generate additional income to reinvest over the years or even live off their dividends after they stop working. Reliable companies paying dividends in sectors of the market that offer growth are ideal, and this is the case with Cisco Systems. It is a global leader in communications equipment that sells a wide range of products in the areas of networking, security, collaboration, applications and the cloud.
Cisco is a good option for buy and hold investors thanks to its strong track record and long-term upside given the high demand for data center solutions, the migration to cloud networks and the expansion of 5G. A strong balance sheet is important because it allows the company to reward shareholders with dividend increases and share buybacks, and with $ 24.5 billion in cash at the end of the first quarter, it is clear that Cisco has a lot of capital to continue this trend. Cisco the stock currently offers a 2.6% dividend yield and recently increased its payout by 14%.
Consolidated Edison (NYSE: ED)
Utility stocks are a good place to look for buy and hold opportunities, as these companies have low elasticity of demand and established companies that investors can rely on regardless of what is going on in the market. economy and the market in general. Consolidated Edison stands out as one of the best utility titles to consider as it provides steam, natural gas, and electricity to customers in New York City and parts of New Jersey. Keep in mind that the rate-regulated electricity and natural gas distribution of Consolidated Edison in New York City helps reduce the volatility of the company’s earnings, which is certainly attractive to conservative investors.
Consolidated Edison also has a clean energy business that is attractive to long-term buyers, as one of the largest owners of solar power farms in North America. We know the world is going to focus significantly on renewable energy sources over the next decade, which could lead to profit growth for the utility company. Finally, the fact that Consolidated Edison has increased its dividend for 47 consecutive years and offers a dividend yield of 3.81% makes it a fantastic option for buy and hold investors.
Costco Wholesale Corp is another great example of a business that investors can count on over the years. With 817 member warehouse stores in the United States, Canada, Mexico, United Kingdom, Japan and more, the company has a large customer base and wholesalers everyday consumer products that people will always need. . Costco is unique in that it provides consumers with great deals that many other competitors simply cannot match, which in turn leads to loyal customers and recurring revenue in the form of membership renewals. .
While many other retail companies have struggled during the pandemic, Costco has only grown stronger, a testament to the success of its business model. The company is also expanding its e-commerce sales channels, which could be a good driver of profit growth over the next few years. Finally, investors can expect plenty of stock buybacks and regular and special dividends over the years from this retail giant, making it a call and hold option. very solid for retirement.
Costco Wholesale is part of the Entrepreneurs index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.