Do you own these 3 safe LICs?

The share market is the best place to have your money invested, the difficulty is knowing which shares to be invested in.

Many investors like the idea of choosing blue chips. I think that’s a good strategy but you don’t want to have all of your portfolio invested in just the big four banks and Telstra.

Perhaps the best way to get exposure to investments like Commonwealth Bank of Australia (ASX: CBA), BHP Billiton Limited (ASX: BHP) and Telstra Corporation Ltd (ASX: TLS) is to invest in listed investment companies (LICs).

Some of the best LICs have been around for many decades and don’t rely on any one individual to generate impressive long-term returns. It also means there’s little chance of the business going bust, unlike holding individual companies.

Most of the biggest LICs have fairly similar holdings to each other, but small differences can have long-term effects on returns, which is why some outperform others.

Here are three of the safest LICs in Australia:

Australian Foundation Investment Co.Ltd. (ASX: AFI) has a grossed-up dividend yield of 5.67% and pays half-yearly in February and August.

Argo Investments Limited (ASX: ARG) has a grossed-up dividend yield of 5.49% and pays in March and September.

Whitefield Limited (ASX: WHF) has a grossed-up dividend yield of 5.37% and pays in June and December.

By combining the above three LICs you can build a fairly diverse portfolio and spread out the dividend payments throughout the year for regular cashflow.

Foolish takeaway

LICs aren’t for everyone but I think that they are worth exploring for most investors, particularly retirees who just want to enjoy their retirement without worrying about buying or selling shares.

However, my above LIC ideas don’t offer much growth. If you want good dividend income and growth, then you should check out these shares.

Are you planning on a blue-chip retirement?

If term-deposit rates stay low your lifestyle expectancy could stay low with them.

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Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. The Motley Fool Australia owns shares of Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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