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3 stocks to buy in your 40s

The types of companies you will be targeting for your portfolio in your 40s will be a lot different to the kinds you would have added in your 20s. It’s likely you will be more established and have a larger asset base behind you after years of working.

A key focus in your 40s will be to protect those assets while making them do the hard work to grow. Quality companies with solid growth plans will be the order of the day. Here are three companies that fit the bill.

Santos (ASX: STO)

Oil and gas producer Santos has passed through the biggest risk phase of growth with its major projects PNG LNG and Queensland’s GLNG and has forecasted a healthy 6% annual compounded growth rate through to 2020.

The company has advised it will review its dividend policy over this time and is expected to offer a higher distribution to shareholders as the company’s cash flows grow substantially.

AMP (ASX: AMP)

Adding AMP to your portfolio will bring diversification across banking, wealth management and investment services. The company has a sound reputation with consumers, is expanding into Asia and is set to benefit from the ever-growing pool of retirement funds that require management.

Despite a poor first half performance in FY13, a reasonable investing horizon will give time for the company’s potential to show through and really put your invested dollars to work. The 5% dividend yield while you wait is a respectable bonus.

Coca Cola Amatil (ASX: CCL)

Let’s face it, a brand that you have known and grown up with for your 40+ years is definitely one with the staying-power to be considered for your portfolio. Coca Cola’s venture into alcoholic beverages, as well as its push for growth in Southeast Asia shows it has room to grow yet, and the strong brand recognition it holds supports strong cash flows and a growing dividend.

The recent weakening in Coca Cola’s share price makes it one to watch.

Foolish takeaway

As you ease into your 40s you will focus more on protecting what you have and building your nest egg for the future. Growth is still important and, just like your appreciation for a fine single-malt, quality should be a priority.

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Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned. 

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