Post Views: 378 It’s true that successful retirement at any time is a function of how prepared you are through your personal finance strategies adopte...
It’s true that successful retirement at any time is a function of how prepared you are through your personal finance strategies adopted to facilitate your financial freedom while playing the financial markets anywhere in the world.
You must as of necessity, understand the big picture of the economy and stock market dynamics to succeed and grow your wealth, by getting involved in a second layer of saving for the raining day, the first being the compulsory contribution through a Retirement Savings Account kept and managed by your Pension Fund Administrator (PFA).
A second layer of saving by actively playing the financial market backed by knowledge is a sure way to guaranty your retirement, just as it could help you determine to retire early and engage in other fields of endeavour. It would also give a great measure of comfort, where you are forced by circumstances beyond your control, including workplace intrigues to give up your paid employment.
The top wealthy men of today who had made fortunes in equity investment are those that recognized the long term nature of the stock market early enough and also know the appropriate keys with which to play the game profitably. The big picture gives an idea of how various facets of the economy work together to influence the market and the share prices of quoted companies.
A blooming economy will have a strong and promising stock market which is the leading indicator or barometer that reveals a country’s economic health and indeed, its prosperity.
An economy consists of the socio-political and business environments that influence business activities which in turn, drive a nation’s development and growth. The economy is sub-divided into market, sector, industry and company. It also has economic cycles that go through a boom to gloom. The boom stages are the early, middle and late expansion periods; while the gloomy stages are the early and late periods of contraction.
For us to retire well and depend on dividend income from our retirement stocks, we must identify the stage our economy is presently and which sector, industry and company can do well in all these stages by remaining in business and posting good earnings that can support dividend payout in the future.
We have to look at the nature of the company’s products and services, and try to determine whether the demand for them is inelastic in nature, such that increase in prices will not have much effect on the demand for them. Is such a company with a clear and simply business model that you understand; do you adjudge the management team good enough; and finally is there are discernible succession plan in place?
Other factors that help identify quality companies are consistent earnings growth, a profit margin that is above 15%, low debt level, improved cash flow and good dividend payout ratio.
These suggest that planning one’s financial freedom through equity investment is very possible if you buy the right stocks for your retirement.
These 10 stocks selected below have shown, in the belief of INVESTDATA Research, strength in their earnings power on quarterly/yearly basis, good dividend yield and consistent growth in dividend payout. Also, the nature of their products or services and business model support their future performance.
1. Nestle Nigeria Plc
3. Zenith Bank
4. Total Nigeria Plc
5. Presco Plc
6. Nigeria Breweries
7. Mobil Oil
8. Access Bank
10. Dangote Cement
These companies have exhibited in their sectors, qualities of operators with all, or most of factors listed above for consideration when selecting retirement stocks.
They are good and top set of stocks you can plan your saving and retirement with, because their services or products are essential to living.
Look forward to the financial formula that will help you achieve your financial freedom now and at retirement.