S&P/ASX 200 Index (ASX: XJO) investors in their 50s are likely starting to think about retirement. The makeup of your investment portfolio is an important consideration. You may want to purchase more dividend-paying shares, as well as larger more stable businesses. Further, diversification is more important than ever to preserve capital.
Investors in their 50s
As investors we’re a motley crew. We all have motley goals, motley resources and motley risk appetite. Because of this, it is important to understand your own personal circumstances and invest accordingly. The below ASX stocks will be fantastic options for most investors in their 50s, but not for all.
2 best ASX 200 shares to buy now
CSL Limited (ASX: CSL)
The largest company in the ASX 200 is a compounding machine! Over the last 20 years CSL has provided investors with a mega 20% annualised total return. The company’s performance has been even better in recent times, returning more than 25% per annum in total returns over 5 and 10 years.
After seeing the CSL share price fall more than 10% in May, I think now provides a nice entry point for new ASX 200 investors. Most of the drop can be attributed to profit taking and concerns over plasma collection issues resulting from COVID-19.
Despite its vast size, CSL should continue to grow well in the future. The stock price may not appreciate as fast as in the past, but I believe that CSL can provide robust market outperformance with less volatility.
Betashares Asia Technology Tigers ETF (ASX: ASIA)
Most people earn their income in Australia, have their savings in Australia and invest in Australia. Australia is the lucky country, but I think ASIA is a great option for ASX 200 investors in their 50s because of its diversification.
This ETF is a great way to diversify geographically into one of the fastest growing economies in the world. Not only that, it provides access to the technology sector, which is underweight in the ASX.
It can often be hard to pick the winner in new technologies. Investment trends such as e-commerce and cloud computing have enormous addressable markets. Because of this, there is likely to be more than one winner in a region. As a market capitalisation weighted ETF, you gain more and more exposure to the businesses winning in these trends over time.
Some of the largest holdings include Alibaba Group and Tencent.
Your 50s is a great time to start diversifying your portfolio and structuring it towards your income needs. Shares should make up part of a well balanced portfolio of multiple investment classes.
These 3 stocks could be the next big movers in 2020
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Lloyd Prout owns shares in Betashares Asia Technology Tigers Ltd and expresses his own opinions. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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.