As is the rule with virtually any form of financial planning, the sooner you start your retirement planning, the better it will be. With more time, you have more chances to make mistakes and learn from them without reducing your probability of growing your nest egg to the proper size to virtually zero.
But with more time to invest and grow, you can also opt for a hands-free investment strategy. By choosing the right blue-chip stocks that can stand the test of time and may offer predictable long-term returns, you can grow your retirement nest egg to a solid size without actively managing your portfolio.
A heavy equipment company
Whether you are investing for your retirement or a short-term financial goal, a reliable growth stock like Toromont Industries (TSX:TIH) can be a powerful addition to your portfolio. It’s one of the most consistent growth stocks currently on the TSX and an established Dividend Aristocrat that has grown its payouts for over three decades.
The underlying company is just as impressive as the stock. It’s one of the largest heavy equipment companies in the world, with a mature diversified business segment (refrigeration). The stock has returned over 461% to its investors in the last decade through dividends and capital appreciation, and if it continues this pattern, you can use it to build a massive retirement nest egg in two or three decades.
An insurance company
Intact Financial (TSX:IFC) is one of the largest insurance companies in Canada and the largest in the Property & Casualty (P&C) insurance segment. It’s also an established Dividend Aristocrat that has grown its payout for 17 consecutive years and currently offers a decent 2.17% yield. If the company keeps up its dividend-growth streak, your income from this company may keep ahead of inflation.
But its capital-appreciation potential is an even more compelling reason to consider adding this stock to your retirement portfolio. The stock rose about 217% in the last decade, and the collective returns (with dividends) were over 300%.
The underlying business is quite sound, and since the company has a powerful presence in multiple international markets, its business growth potential is quite promising as well.
Royal Bank of Canada (TSX:RY) is easily one of the best bank stocks in Canada that you can invest in. As the largest Canadian bank and the largest company trading on the TSX (by market cap), it’s quite a safe bet. But stability is not the only considerable offering of this investment. The bank offers a healthy mix of growth and dividends, and since it’s an Aristocrat, the payouts will most likely keep growing.
The bank is currently offering a decent 3.8% yield, though you can significantly improve upon it by buying the stock when it’s heavily discounted. Its long-term growth potential is not on par with the two stocks, but it’s still substantial and is enough to double your capital without the need for dividends.
The three blue-chip stocks are compelling candidates for your retirement portfolio. They are safe, resilient against market headwinds, leaders in their respective fields, and offer a decent return potential that can help you build wealth over time.