When you finally reach retirement I'd hope that's the most stress free part of your life. You've already spent decades working and stressing about deadlines and so on.
Do you know what doesn't sound relaxing to me? Stressing about your portfolio every day. That doesn't mean ignoring your portfolio if you invest in individual shares, that just sounds like a recipe for underperforming the market average.
When you're in retirement I'd imagine you want high income, but perhaps not having as risky shares as your younger years. If that sounds like you, I have three suggestions:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is perhaps one of the lowest-risk shares on the ASX. It's over 100 years old and hasn't missed paying a dividend, even through wars and recessions. Indeed, it has increased its annual ordinary dividend every year since 2000, including through the GFC.
I like Soul Patts so much as an investment idea because it is 'adaptable'. It's an investment conglomerate that takes large stakes in businesses it believes have a good long-term future. That means it can change its investments as time goes on, it isn't 'stuck' as a telco or supermarket business.
It currently has a grossed-up dividend yield of 4%.
WAM Research Limited (ASX: WAX)
WAM Research is my favourite WAM listed investment company (LIC) for income. It looks for undervalued growth companies and only invests if it sees a 'catalyst' that will change the valuation in the short to medium term.
It has been very successful with this strategy, as its portfolio has returned an average of 15.6% per annum over the past three years, before fees.
It currently has a grossed-up dividend yield of 9%.
Naos Emerging Opportunities Company Ltd (ASX: NCC)
This is a LIC run by Naos which focuses on the small end of the Australian share market, it aims for businesses with market capitalisations less than $250 million.
It's the oldest LIC run by Naos and it has been very successful with its strategy of holding a small number of shares with a medium-term investment timeframe. Its portfolio has returned an average of 14.59% per annum before fees over the past five years.
It's currently trading with a grossed-up dividend yield of 8.9%.
Foolish takeaway
These three shares together have an average yield of 7.3% and have delivered market-beating returns over the long-term. I'd happily invest in these three shares and not look at my portfolio again for another five years. That sounds like a stress-free retirement to me!
