Generally, an individual’s risk appetite will fall with age. This is because someone in their 20s has a lot more time to recoup their losses compared to someone in their 60s who is nearing retirement and will soon be reliant on their current nest egg to fund their future lifestyle.
In light of this, it may be important to focus on capital preservation when you are reaching retirement and select shares that are consistent with your risk profile and investing timeframe.
With that in mind, here are a couple of shares that could be suitable for a well-balanced retirement portfolio:
National Storage REIT (ASX: NSR)
National Storage could be a good option for a retirement portfolio. It is one of the region’s largest self-storage operators with a total of over 200 centres in the ANZ market. Through this growing network the company provides tailored storage solutions to tens of thousands of residential and commercial customers.
The good news is that management still sees plenty of room to grow both organically and through acquisitions and developments. The latter is thanks to the company operating in a highly fragmented industry.
According to a note out of Ord Minnett, its analysts have an accumulate rating and $2.05 price target on its shares. The broker is forecasting an 8 cents per share dividend in FY 2021 and 9 cents per share in FY 2022. Based on the current National Storage share price, this represents 4.25% and 4.8% yields.
Transurban Group (ASX: TCL)
Another option for retirees to consider is Transurban. This leading toll road operator owns a collection of important roads in Australia and North America.
Due to the quality of these assets and their strong pricing power, Transurban appears to be well-placed to increase its dividend at a solid rate over the next decade once the pandemic passes.
In the meantime, analysts at Macquarie think it is worth being patient with the company. It has an outperform rating and $15.93 price target on its shares. The broker is forecasting a 41.9 cents per share dividend in FY 2021 and then a 58 cents per share dividend in FY 2022.
Based on the latest Transurban share price of $13.32, this will mean yields of 3.15% and 4.35%, respectively.
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Returns As of 15th February 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.