When you’re young and first start investing you might focus on growth shares that offer potentially strong returns like Afterpay Ltd (ASX: APT).
After all, if things don’t go quite to plan, you have plenty of time to recover from your losses.
But as you enter retirement I believe it would be prudent to put these types of investments on the backburner in favour of those that offer income and capital preservation.
Three shares which I think are great for retirees right now are as follows:
Coles Group Ltd (ASX: COL)
I think Coles would be a very good option for retirees. This is due to the combination of the supermarket giant’s defensive qualities, strong market position, and generous dividend policy. In respect to the latter, Coles intends to payout 80% to 90% of its earnings to shareholders as dividends. I believe this bodes well for shareholders given the company’s solid growth prospects thanks to its long track record of same store sales growth and its refreshed strategy. This strategy is cutting costs and making its operations more efficient.
National Storage REIT (ASX: NSR)
This self-storage-focused real estate investment trust could be a good option for retirees as well. It is one of the largest self-storage operators in the ANZ region and has plans to grow even larger in the coming years through development projects and its growth through acquisition strategy. I expect this to support solid income and distribution growth over the next decade, especially given the improving housing market. This traditionally results in growing demand for its services as people move homes or downsize.
Wesfarmers Ltd (ASX: WES)
Another option for retirees to consider is Wesfarmers. I think the conglomerate would be a good option due to the quality, diversity, and positive outlook of its portfolio of businesses. These businesses include hardware giant Bunnings, Officeworks, Target, Kmart, lithium miner Kidman Resources, its stake in Coles, and the growing online retailer Catch. Furthermore, I wouldn’t be surprised if the company added to its portfolio this year after recently selling part of its stake in Coles.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of Wesfarmers 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 Scott Phillips.