If you’re over 50 I think there are a few ASX shares that should be in your portfolio.
It’s probably fair to say that you don’t want to be risking all of your money on a few speculative growth shares when you’re getting close(r) to retirement.
Sure, shares are riskier and more volatile than cash. But it would be a mistake to avoid them altogether. There are some shares that have quite low risk, whereas there are other shares that are extremely risky.
I believe it’s important to still have growth investments because you have decades of good living to enjoy. Cash earning less than 2% in the bank is not going to give a great quality of life.
Here are three ASX shares I think investors over 50 should own:
Magellan Global Trust (ASX: MGG)
Did you know that the ASX only represents around 2% of the total global share market? There are a lot of opportunities in the rest of the 98% of the world’s stock market.
Magellan Global Trust is a listed investment trust (LIT) and it only invests in the best, highest-quality businesses in the world. I’m sure you’ve heard of many of its top holdings: Alphabet (Google), Apple, Microsoft, Visa, Mastercard, Facebook, Starbucks, LVMH and so on.
It has a solid record since inception in October 2017, returning an average of 16.6% per year after fees, outperforming the global share benchmark by 2% per year.
Half of its portfolio is invested in defensive assets and it aims to pay investors a 4% distribution yield.
WAM Global Limited (ASX: WGB)
Most of the shares that Magellan Global Trust invests in are some of the biggest in the world, but some of the medium and smaller international businesses are worth investing in as well.
WAM Global is a listed investment company (LIC) and targets undervalued growth companies. Some of its top holdings at December 2019 include: Logitech, Diageo, Hasbro, HCA Healthcare, Ubisoft, S&P Global and LVMH.
2019 was a strong year for the WAM Global portfolio, it rose by 28.2% over the 12 months. WAM Global aims to pay shareholders a growing dividend.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
I often describe Soul Patts as the gold standard for income on the ASX. It has increased its dividend every year since 2000. It has paid a dividend every year in its existence since the start of the 1900s including through wars.
It’s an investment conglomerate that has a diversified portfolio. Unlike Magellan Global Trust and WAM Global, Soul Patts is internally managed – it doesn’t pay any external management fees, which helps net returns.
Soul Patts invests for the long-term. It tries to own uncorrelated assets. It tries to invest with a contrarian nature. It has large positions in shares like TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW). This strategy clearly works because Soul Patts’ total returns have outperformed the ASX over the long-term.
Each of these businesses have proven to be good performers if share markets fall. They are quite likely to outperform their respective benchmarks over the long-term, they’re likely to steadily grow income for investors and you can own them for a very long time without worrying what they’re doing – their holdings will steadily change over time. There are plenty of reasons why they’re all in my own portfolio.
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Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS, WAMGLOBAL FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks. 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.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020