When you first start out investing, you might seek market beating returns from high risk, high reward growth shares. After all, if things don’t go quite to plan, you have plenty of time to recover from your losses.
But as you approach or enter retirement, I think these types of investments should start to take a backseat and become just a small part of a portfolio.
Instead I think investors at this stage in their investment journey should focus on those that offer both income and capital preservation.
With that in mind, I have picked out two ASX shares which I think would be great options for a retirement portfolio right now. They are as follows:
Coles Group Ltd (ASX: COL)
The first ASX share I would consider buying for a retirement portfolio is Coles. In fact, I think the supermarket giant is arguably the best option on the Australian share market for retirees to buy. This is because it offers the winning combination of defensive earnings, solid growth prospects, and a decent yield. In respect to the latter, based on the current Coles share price, I estimate that it offers investors a fully franked forward 3.1% dividend. I think this is very attractive in the current low interest rate environment.
Dicker Data Ltd (ASX: DDR)
Another top option for a retirement portfolio could be this wholesale distributor of computer hardware and software. I think Dicker Data would be a great option due to its robust business model, solid growth prospects, high levels of insider ownership, and its quarterly dividends. Business has been booming in FY 2020 and management intends to increase its dividend by around a third to 35.5 cents per share. With the Dicker Data share price currently fetching $7.36, this equates to a generous fully franked 4.8% dividend yield.
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More reading
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- ASX 200 plunges 3.1%, Afterpay suffers
- The best dividend shares to buy today
- Quarterly rebalance: Coles and Fortescue added to ASX 20, Zip joins the ASX 200
- 2 solid ASX dividend shares for income in 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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.
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