Retirement is a big deal for most Australians. After all, while many people find work and their careers very enjoyable and satisfying, making sure you have enough money saved up to live life to the full in retirement is an important consideration.
So, with the ASX being down 2% since the start of the year, 2014 has been a frustrating year for the vast number of people who are investing towards their retirement.
Of course, challenging years are par for the course when it comes to investing. And, over the long run, investing in shares is still the best way to ensure that your retirement fund is big enough to enjoy the countless holidays and other major purchases you have planned for your later years.
With that in mind, here are three stocks that could make a real difference to the size of your retirement fund and, as a result, could be worth buying today.
Looking back at the track record of Amcor Limited (ASX: AMC) when it comes to earnings growth, it is mightily impressive. For example, over the last 10 years, it has managed to increase its bottom line at an annualised rate of 8.4%, which is extremely impressive.
Clearly, this is a company that is able to deliver over the long run and, looking ahead, its shift towards niche products that offer high levels of demand and relatively large margins means that it has a bright long-term future. Furthermore, its short-term income could be somewhat aided by a potential lowering of interest rates, which would aid a large exporter such as Amcor through a possible weakening of the Aussie dollar.
While shares in the company trade on a P/E ratio of 17.8, their long-term track record means they appear to be worth their current premium over the ASX, which has a P/E ratio of 15. As such, Amcor could be a great buy for retirement funds.
Woodside Petroleum Limited
Although the recent fall in the oil price is undoubtedly bad news for oil producers such as Woodside Petroleum Limited (ASX: WPL), it offers long-term investors the chance to buy the stock at a more appealing price.
For example, Woodside has a P/E ratio of just 10.5 and yields 6.9% — both are indicators of great value being on offer. Certainly, the short to medium-term outlook for the stock is relatively downbeat, but the oil price is unlikely, in most investors’ opinions, to remain so low over the long term.
As such, buying high-quality oil operators such as Woodside Petroleum now could prove to be a great move for investors who are thinking about the value of their portfolios in a number of years from now.
With the ASX having had a disappointing year and still being someway off its all-time highs, now could also be an opportune moment to buy shares in AMP Limited (ASX: AMP). That’s because the wealth management company’s fees are closely aligned to the performance of the stock market and if you are bullish on the long-term prospects for the ASX, higher earnings could lie ahead for AMP.
Of course, AMP also appeals as an income play, too. It currently has a partially franked yield of 4.6% and, with dividends set to rise at a double-digit rate over the next two years, this could top 5% over the medium term.
In addition, a cut in interest rates could provide the ASX with a short term boost in 2015 and, with a beta of 1.77, shares in AMP could build on the 21% gains made so far in 2014.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.
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