Monday, July 13, 2020

Telstra and this ASX 200 share could be top picks for retirees

Retirement shares

As I mentioned here yesterday, when you’re in your 20s your portfolio is likely to have a higher than normal weighting to growth shares such as Afterpay Ltd (ASX: APT).

After all, if things don’t go to plan, you have time on your side to recoup your losses and grow your wealth.

But it’s a very different story when you are approaching retirement and capital preservation and income become the key focuses.

For those investors, I have picked out two top ASX shares which I think would be great options right now. Here’s why I think they are perfect for retirees:

Goodman Group (ASX: GMG)

Goodman Group is an integrated commercial and industrial property group. It owns, develops, and manages industrial real estate in 17 countries. Among its portfolio you’ll find warehouses, large scale logistics facilities, and business and office parks. It is the warehouses and logistics facilities that attract me to the company the most. I believe these position it perfectly for growth by giving it exposure to the structural tailwinds of the ecommerce market. Especially given its relationships with the likes of Amazon and Walmart. Incidentally, the company strengthened its relationship with Amazon today. The tech giant has signed a 20-year lease for a distribution centre owned by its joint venture with Brickworks Limited (ASX: BKW).

Telstra Corporation Ltd (ASX: TLS)

Another share for retirees to consider buying is Telstra. The telco giant has fallen out of favour with investors over the last few years due to the NBN rollout. The loss of its fixed line revenues created a huge gap in its earnings and led to sizeable dividend cuts. However, I believe it is time to reconsider your view of the company. Firstly, I believe Telstra’s dividend is now at a sustainable level based on its current cash flows. And secondly, I’m optimistic that that a return to growth is not too far away. This is thanks to cost reductions, the simplification of its business, and the easing of the NBN headwind. This could make it an opportune time to make a patient investment in its shares.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and Wesfarmers Limited. 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 post Telstra and this ASX 200 share could be top picks for retirees appeared first on Motley Fool Australia.


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