In prior generations, figuring out the best retirement stocks to buy was a relatively straightforward proposition. You take a good company with a solid business (one that hopefully pays a consistent dividend) and put it in automatic mode in your portfolio. Over time, these “sure bets” provided enough stability to keep you going.
But that was then. Today, the best stocks for retirement don’t necessarily follow a clean, linear path. Many economists argue that we’re in the midst of the fourth industrial revolution. In a nutshell, the first two phases involved accelerating human efficiency. The internet sparked the third revolution. Now, with human capacity maxed out, we’re exploring machine learning and automation.
I’m not suggesting, though, that machines will replace human workers entirely. We’ll still have a need for commerce, education, transportation and other social functions. The future will look very similar to what we see now, at least from the outside. But the nature of work and employment will change. This shifting tide necessitates a different approach toward stocks for retirement.
For example, rather than looking strictly at dividends, visionary investors should consider relevancy. That is, the best stocks to buy underline organizations that will likely be around for the next few decades. Obviously, there’s no point in acquiring income-generating investments if they’ll collapse five years from now.
So with that backdrop, here are ten of the best retirement stocks to buy now.
Admittedly, tech firm Square (NYSE:SQ) doesn’t classify as one of your typical retirement stocks to buy. For now, it’s purely a growth name. Although returns have been monstrous, cyclicality; therefore, volatility is a major concern. Obviously, SQ stock does not pay a dividend.
So why include it among the best stocks for retirement? Because few investments have a legitimate chance for long-term relevancy quite like SQ stock. As I’ve explained many times before, small business represents the somewhat underappreciated engine of the U.S. economy. I expect this trend to continue forward, which is why you’ll want exposure to SQ shares.
The days of giant corporations are coming to an end. Market revolutions such as e-commerce have put these names on the firing line. Instead, the future economy will be built upon small, agile businesses. Square’s payment-processing products and services give these next-generation companies the ability to compete effectively.
Although I might look like a younger version of him, I’m no Michio Kaku. Logically, this also means that I’m no futurist. But looking decades ahead, I’m certain that social media will likely play a critical part in how we live.
With its two-billion plus user base and investments in multiple technology-based ventures, Facebook (NASDAQ:FB) appears to be the best long-term bet. However, I’m going to go out on a limb and give the nod to Twitter (NYSE:TWTR).
A major reason why is the changing nature of fame and stardom. Recently, I had a chance to speak with actress Catherine Bell and her son. Instead of merely asking for a photo, I also requested an autograph. That must have been a throwback moment for them, and in the process, I witnessed a very cool mother-son exchange.
Today, regular folks aren’t impressed with autographs. Instead, they expect interactions with their favorite celebrities. I think this dynamic will only grow in magnitude, which is why I like TWTR as one of the longer-term retirement stocks to buy.
H&R Block (HRB)
For the longest time, I considered H&R Block (NYSE:HRB) an anomaly. Obviously, most Americans are employees. Furthermore, most of this group are clock-punchers, or those who get paid hourly. Therefore, their tax preparation is straightforward. Even if a young worker had some questions, you learn it once and you’ll never forget.
With such simplicity, this does not support H&R Block’s inclusion among retirement stocks to buy. Even if a clock-puncher acquires assets like real estate, a Schedule A isn’t that difficult to complete. Plus, President Trump’s tax reforms providing generous standard deductions almost moots Schedule A.
So why discuss HRB stock? Because the country’s labor force is rapidly shifting toward the gig economy. With automation on the rise, we’ll see more independent contractors, not employees. As it stands, an independent contractor’s taxes are much more complicated than a typical worker bee’s taxes.
Therefore, don’t neglect HRB among your best stocks to buy for retirement.
Alphabet (GOOG, GOOGL)
Similar to Square, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) doesn’t typically slot its name among retirement stocks to buy. Its focus is on internet technologies and disrupting old platforms with more efficient digital ones. Plus, it doesn’t currently pay a dividend, which attracts criticism for wasting its cash hoard.
Perhaps in the future, GOOG stock will become an income-generating investment. But that’s not why I’m pegging Alphabet as a long-term bet. Instead, I love its dominant position in the search-engine space. With the internet having quickly matured, I don’t expect Google to follow in Netscape’s path: Alphabet is too ingrained to give up the No. 1 spot.
But I’m also digging management’s drive to expand their revenue sources beyond just digital advertisements. For example, automated-taxi service Waymo is more or less an experiment. But a decade down the line, this could very well be the future of personal transportation. Therefore, I think you can trust GOOG stock for the long haul.
In recent months, I’ve written extensively about telecommunications giant AT&T (NYSE:T). To avoid overplaying the same song, I’m going to switch things up and discuss Verizon (NYSE:VZ). It’s an easy switch, though, because the same principles apply.
Regarding best stocks to buy for retirement, VZ hits the right notes. Like its rival AT&T, Verizon is an industry behemoth. Most likely, it’s not going to give you the crazy returns you’d expect from an upstart tech firm. At the same time, it probably won’t leave you devastated during a downturn. Plus, you can bank on that 4.2% dividend yield.
But the overriding reason to seek exposure to VZ stock is 5G. The next-gen wireless network will form the backbone of future technologies. In fact, some experts believe that if integrated properly, no need will ever exist for 6G technology.
I’d take that forecast with a grain of salt since tech never sleeps. But if it does turn out that way, you’ll want exposure to VZ stock (or AT&T) now.
With Amazon (NASDAQ:AMZN) and the e-commerce revolution contributing to decaying malls across America, proposing Target (NYSE:TGT) as one of the retirement stocks to buy appears rather strange. TGT is a behemoth of a brick-and-mortar organization. Such business models are on the way out, so why recommend it here?
Target has found a brilliant way to remain relevant in the 21st-century economy. All Target stores have one thing in common: massive parking lots. Prior to the rise of electric vehicles, most of these spaces would go unused (save for Black Friday).
But with EVs, management recognized an opportunity: install charging stations, allowing shoppers to peruse their stores while charging their vehicles. It’s brilliant for many reasons, but I’ll list two. First, the charging stations incentivize shoppers to come to the stores. Second, those shoppers will likely spend more time in the stores while they “fill up” their EVs.
Kimberly Clark (KMB)
Most of the names on this list of retirement stocks to buy have some connection with technology. Of course, this is an inevitability: barring a few exceptions, societies always progress. But despite the push to ever-increasing innovations, some things will always stay the same. That’s why I like Kimberly Clark (NYSE:KMB) for those with a very long-term view.
Let’s take for instance toilet paper. Dr. Kaku once made a remark that in the future, toilets will replace many medical-diagnostic centers. Every day, our toilets collect valuable biological information about us via “number one” and “number two.” It’s a stunning concept among several that Kaku has envisioned or forecasted.
But I’ll propose that the way we clean ourselves will still incorporate good ole fashioned paper products. In that sense, KMB stock will never go out of style. And if you don’t find that argument convincing, you can always look to its 3.2% dividend yield.
Few, if any, have suggested cannabis firm Tilray (NASDAQ:TLRY) be considered a contender among the best stocks to buy for retirement. For one thing, TLRY stock is incredibly volatile, contrasting sharply with typical retirement investments. The other detracting point is that the marijuana segment is the market’s wild west.
All of these things are true if you’re retiring tomorrow and need consistent income. However, if you’re able to accommodate some patience, TLRY stock is a surprisingly viable name. That’s because the legalization momentum is not just a matter of individual liberties. Instead, it speaks to the effectiveness of natural therapies, and the indictment of artificial, pharmaceutical concoctions.
I’ve mentioned before about how big pharma played a big role in the current opioid crisis. But recently, professional athletes are pressuring their leagues to adopt cannabis friendly protocols. The issue makes sense: cannabis products like cannabidiol, or CBD, provide pain relief with no known side effects.
With so much evidence favoring full marijuana legalization, I think you can trust TLRY stock longer term.
Aqua America (WTR)
Utility companies often represent some of the best stocks for retirement. Usually, they generate consistent, stable revenues due to their secular demand. After all, when you flip the switch, you expect the light to turn on. As a result, utility companies tend to pay dividends.
In that regard, Aqua America (NYSE:WTR) classifies as a traditional retirement-friendly investment. With the exception of 2017, top-line sales have consistently increased in recent years. Furthermore, WTR pays an okay dividend of 2.2%. A bonus is that shares have performed well in the markets.
Although they’re all good points, that’s not the reason why I’m particularly interested in WTR. Rather, water is the most precious commodity that we have. As a water-utility services specialist, Aqua America will likely experience a surge in demand.
It really comes down to simple math. Internationally, we’re witnessing a rise in per-capita income levels. This dynamic translates to increased resource consumption, most notably water. Once basic supply and demand have their way, I anticipate WTR skyrocketing. Therefore, don’t neglect to consider it among your stocks to buy.
Inarguably, the most controversial name in the markets in the here and now is Uber Technologies (NYSE:UBER). Since its initial public offering, UBER stock has dropped more than 17%. Even before this disastrous introduction, critics blasted the company for its exploitative business practices. And for years, the company has absorbed devastating PR crises.
No question, Uber is a risky play, which is why I’m putting this name dead last on my list of stocks to buy. But despite all the noise, the tech firm’s core idea is a compelling one: funnel taxi services into a single, centralized platform that crosses all international borders.
As I discussed previously, Uber gives me the opportunity to explore regions without having to worry about language or customs. With this platform, I only have to concern myself with one language: money. Give me good service, and you’ll get rewarded. Don’t and you won’t see me or my wallet ever again. This naturally incentives good behavior, even in notoriously brutish countries.
Plus, Uber is more than just ride-sharing. The company is levering its acumen toward other viable channels of the sharing economy. Sure, UBER is risky, but over the long run, I think it’s a risk worth taking.
As of this writing, Josh Enomoto is long T stock.