Retired investors must balance several competing priorities. The biggest is capital preservation. What good is building decades of wealth only to lose it when you need it most? The next is growth. Retirement often lasts for decades, and foregoing potential upside might dramatically reduce your portfolio’s value years down the road. The last consideration is income. Retired investors often demand passive income to help replace other sources of income.
How do you balance the need for safety, growth, and income? Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM) is your secret weapon.
Brookfield is an alternative asset manager with nearly $400 billion in assets. For more than 100 years, the company has been creating unique investment strategies that are perfect for retirement portfolios. In each case, the company establishes a niche portfolio of assets that are set to benefit from multi-decade opportunities. The company’s approach nearly always results in risk-mitigated returns, long-term upside, and regular cash income.
Brookfield manages a number of investment strategies, but the following three picks are your best bet for a comfortable retirement.
Growing the world
Brookfield Infrastructure Partners (TSX: BIP.UN)(NYSE: BIP) is benefiting from the largest growth market in centuries: population growth. By owning critical infrastructure around the world, including seaports, highways, and power plants, Brookfield Infrastructure is directly exposed to increased demand for transportation and energy as a result of rising populations. In most cases, the company’s assets have several decades of growth ahead.
This strategy is ideal for retirees. First, the underlying assets are recession resistant. Even during the worst downturns, there’s still plenty of demand for critical highways, seaport terminals, and electricity. Second, the businesses throw off regular cash. The current dividend stands at 4.2%, but the multi-year average is closer to 5%. Lastly, infrastructure is a reliable growth opportunity. Long term, the company stands at a great chance at compounding investor capital at double-digit rates.
World-class properties
Brookfield Property Partners (TSX: BPY.UN)(NASDAQ:BPY) owns and operates commercial property, the majority of which are located in North America, Europe, and Australia. While this stock doesn’t have as much growth as Brookfield Infrastructure, it does have a much higher yield. Currently, the payout totals 6.6%. Over the last few years, the dividend has grown by nearly 6% annually.
Since 2013, the stock has consistently shown less volatility than the overall market. The last few months have been difficult, however, as major tenant Forever 21 is considering bankruptcy. The stock now trades at 32% below net asset value. Long term, the company’s investment strategy won’t be impacted by the loss of a single tenant. The current dividend also looks rock solid, despite the ultimate outcome. If you want a high-income machine that should do well in a variety of futures, Brookfield Property is a top pick.
The next century
Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP) is yet another perfect stock for retirement portfolios. As the name suggests, Brookfield Renewable is a pure-play renewables company. It’s already one of the world’s largest investors in renewable power, with 18,100 megawatts of generating capacity. With assets located in North America, South America, Europe, India, and China, its portfolio is diversified across hydro, wind, solar, storage, and other renewable technologies.
The rise of renewable energy should be a growth market for several decades to come. Given it often contracts power on long-term agreements, this stock will likely outperform during a bear market. In addition, its current project portfolio generates a 5.5% dividend. Long term, analysts expect growth to average nearly 10%. That won’t break the bank, but it’s a welcome addition to a bulletproof stock with an above-average dividend.
