With the ASX making gains of just 3% in 2014, it's perhaps unsurprising that a number of investors are losing faith with shares.
After all, that growth rate is roughly in-line with inflation, which means that in 2014 a real return has only been provided by the income component of total return.
However, for investors who wish to retire early, shares really are the best option since they offer unrivalled long term growth potential and, with the ASX having disappointed in 2014, now could be the perfect time to add these three blue-chips to your retirement fund.
BHP Billiton Limited
Although BHP Billiton Limited (ASX: BHP) is a well-diversified mining company, the falling price of commodities is still due to hit it hard. Indeed, profit for the current year is expected to be around 15.1% down compared to last year, with a lower iron ore price being a notable brake on profitability growth.
However, BHP Billiton still has huge future potential. It maintains a very low cost curve across its operations and is able to increase supply to offset lower prices (to an extent). It also has the potential to begin exporting oil (in the form of processed condensate) from the US and, while the price of oil has fallen heavily, this could provide the company with an additional revenue stream.
Indeed, with shares in BHP trading on a P/E ratio of just 13.4 and yielding 4% (fully franked), it appears to represent good value at the moment and could prove to be a strong performer in 2015 and beyond.
Oil Search Limited
With the oil price dipping to below $80 per barrel, you'd have thought that Oil Search Limited's (ASX: OSH) share price would have pulled back much further during 2014. Indeed, shares in the LNG and oil exploration stock are up 5% year-to-date and there could be more to come.
That's because the company has a supremely low price to earnings growth ratio of 0.27, which indicates that the current share price does not accommodate the company's superb future growth prospects based on LNG production.
Certainly, forecasts may have to be pegged back somewhat as a result of a lower oil price, but with Oil Search's key PNG LNG operation set to 'turn on the taps' next year and move to full production, now could be an opportune moment to buy a slice of the stock – especially for long-term investors who can live with shorter term volatility.
Amcor Limited
With shares in Amcor Limited (ASX: AMC) hitting all-time highs in recent weeks, now may seem like the wrong time to buy shares in the packaging company. After all, they are hardly cheap, having a P/E ratio of 16.1 versus 15.8 for the ASX.
However, Amcor has impressive long term potential that could help it to make even higher highs. Indeed, it is focusing on emerging market growth in future, with Amcor believing that such markets offer the best risk/return ratio over the medium to long term. With around 30% of its top line being accounted for by emerging markets, Amcor already has a substantial exposure to such countries and so it will be a case of expansion as opposed to gaining a foothold.
With a strong track record of earnings growth (Amcor's bottom line has increased at an annualised rate of 8.4% over the last ten years) and the potential for more to come over the medium to long term, Amcor could prove to be a great addition to your retirement portfolio.
