Anyone who hasn’t saved anything for retirement by age 50 and wants to save their retirement with top stocks should proceed with caution. At the end of the day, every return is good and the opportunities are currently strong. But with time and the possible compound interest effect, I would try to invest as best I can.
Profitability, quality and strong brands would be my priority. It doesn’t always have to be a conservative dividend stock that can still seem a bit expensive with pricing.
No, but also happy to share Etsy (WKN: A14P98) and Berkshire Hathaway (NASDAQ:FB) may be top stocks relevant at 50. Especially if you haven’t saved or invested anything yet and are now looking for opportunities to save for your retirement.
Etsy: Top Stock If You Haven’t Invested For Retirement Yet?
Etsy has long been a growth stock. But in the past a real top share. The market has changed since the corona profiteers have been punished. But with that comes the valuation, which could make this stock an interesting name if you’re still looking to save for retirement in your 50s.
Etsy is now, at least halfway, something of a value stock. In times of the pandemic, management has worked out a profitable level. With an earnings per stock recently at US$3.40, the P/E ratio would currently be around 27. I think that’s pretty cheap even if the value were to collapse again in the short term.
The bottom line is that the bet on top stocks and in your 50s to save for retirement is this: A lot can happen in a decade and a half. Etsy can probably still increase the marketplace significantly in terms of the amount of items (last 13 billion US dollars). After all, the overall market is said to be worth billions. Earnings per share should therefore also grow in the long term and thus the profit margin.
Just 10% average annual earnings growth over 15 years would be enough for Etsy stock to trade at a price-to-earnings multiple of less than 7. That could be conservative, and the yield could be very high.
Berkshire Hathaway: The Compounding Machine!
Berkshire Hathaway stock is another top stock for saving retirement. In fact, it always is. After all, Warren Buffett created a compound interest machine with a long-term goal of increasing net asset value per share. share with free cash flow and solid earnings. Previously, this was achieved with an average increase in value of 20% per year. Is it still possible? we will see. After all, the Oracle of Omaha is now starting to invest again in this market.
Berkshire Hathaway can also help you if you haven’t saved or invested for your retirement by the time you’re 50. With each share, you get a selectively chosen cross-section of the US and parts of the global economy. The focus is clearly on the quality of the respective companies.
Again, a decade and a half is a solid period. Whereby Warren Buffett has options to generate returns in any market environment: invest, hold cash, buy back shares or just do nothing and let compound interest do its work. Know-how in particular is the decisive quality feature here.
The article Nothing saved for retirement at 50? These Top Stocks I’d Bet on Retirement (No Dividends!) appeared first on The Motley Fool Germany.
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Vincent owns shares in Berkshire Hathaway and Etsy. The Motley Fool owns shares in and recommends Berkshire Hathaway (B shares) and Etsy and recommends the following options: short January 2023 $200 put on Berkshire Hathaway (B shares), short January 2023 $265 call on Berkshire Hathaway (B shares) and Long January 2023 $200 Call on Berkshire Hathaway (B shares).
Motley Fool Germany 2022