$1 million seems to be the minimum most people will need for a comfortable retirement in future (although recent news reports suggest we need much more than that if we want to maintain our existing lifestyles).
The best way to get there is by investing in some core quality stocks, adding some high-potential growth companies with possibly a small number of speculative stocks.
Here are five core stocks you need to have in your portfolio.
Coca-Cola Amatil Ltd (ASX:CCL) has had a horrible run, struggling with competitive pressures, as well as dominant supermarket retailers. Add in SPC Ardmona's recent woes, negative currency movements and Coca-Cola Amatil still faces some huge headwinds. The good news is that most of these issues are likely to be temporary, and at today's prices, CCA's shares are likely to be a bargain.
Telstra Corporation Ltd (ASX: TLS) recently signalled that mobile subscriber growth would slow. While it is one of the main drivers of growth for the telco, Telstra has plenty of other levers it can pull to generate rising cash flows. Rising data usage – caused by things like the recent arrival of Netflix means many subscribers will be forced to upgrade their subscription packages. Add in the solid fully franked dividend of 4.8% and what more could you want?
CSL Limited (ASX: CSL) never looks cheap, and that's a testament to the quality of the company and its management. The blood plasma products producer has significant global market share and rising demand for its products around the world. A 26.7% average annual return over the past decade clearly shows how this company has delivered for shareholders.
Insurance Australia Group (ASX: IAG) is one of Australia's best-known insurers with brands including NRMA, CGU, SGIO and Swann insurance. The acquisition of Wesfarmers insurance underwriting business will boost revenues and growth, and IAG currently pays a fully franked dividend yield of 6.6%. Grossed up, that's a whopping 9.4%!
Last but not least, is Woolworths Limited (ASX: WOW). Arguably Australia and New Zealand's premier supermarket retailer, Woolies is expanding into home hardware – while its liquor, hotel, petrol station and discount variety stores continue to grow. Forget ALDI as a serious competitor – it will remain a bargain basement supermarket, and will never match Woolies (or Coles for that matter) for a wide range of products and services. Price isn't everything.
