The financial crisis did major damage to retirement nest eggs. Especially for those in or close to retirement, the hit they took was massive. The market recovery over the past two years has done a lot to repair that damage, but retirees and near-retirees still have to make sure they own the best investments they can find.
To help give you ideas on stocks to buy and others to avoid, we asked some of our Motley Fool analysts to weigh in with their opinions about their favorite stocks for conservative investors, as well as stocks they think are flashing warning signs right now. Read on to see their ideas.
Travis Hoium, Motley Fool contributor
When looking at stocks for retirement, I like to see three qualities: The stock must be a good value, it should pay a dividend, and the company has to make something I can touch and feel. Tangible products mean capital investment and research and development, which reduce the risk that someone in a dorm room can blow up your business model (like Google and Facebook did).
But what stock should you avoid heading into retirement? I would avoid Post-It Note maker 3M
Chuck Saletta, Motley Fool contributor
Retirement is a time when investors' priorities turn to generating current income and inflation protection from their portfolios. It stands to reason that the ideal type of stock for them to own is one that has:
- A decent dividend yield, providing current income.
- Regularly raised that payment, providing a measure of inflation protection.
- A reason to believe that behavior will continue.
Energy pipeline giant Kinder Morgan Energy Partners
That said, not all high-yielding stocks belong in a retiree's portfolio, especially if that retiree needs every dime of income to cover his or her costs of living. For instance, mortgage REIT Annaly Capital
Sean Williams, Motley Fool contributor
Those nearing retirement shouldn't have to spend their golden years wondering whether their portfolio is going to send them to the poor house. Investing for retirement means finding conservative investments that can weather any economic environment -- essentially, the set-it-and-forget-it approach.
One name that immediately comes to mind is Johnson & Johnson
On the other hand, I'm not as comfortable with U.S. tobacco giant Altria Group
Find some other ideas for retirement-worthy stocks in the Fool's special free report, "5 Stocks The Motley Fool Owns -- And You Should Too." Get instant access.
Fool contributor Dan Caplinger compiled this roundtable, and he doesn't own shares of any of the stocks or ETFs mentioned. Chuck owns shares of Annaly Capital Management and of Kinder Morgan Management, a related company to Kinder Morgan Energy Partners. The Motley Fool owns shares of Annaly Capital Management, Altria Group, Intel, and Johnson & Johnson and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Intel, Johnson & Johnson, and 3M and creating a diagonal call positions on Intel and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy makes you feel like a knight at King Arthur's roundtable.