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Best Stocks to Hold for a Wealthy Retirement

Building a solid financial foundation for retirement requires more than just saving money; it involves investing in the right assets that grow steadily over time.

Choosing stocks that offer stability, consistent growth, and dependable income can make the difference between a comfortable retirement and a wealthy one.

By selecting companies with proven business models, strong market positions, and sustainable dividend yields, investors can secure long-term gains and ensure a rich retirement.

In this guide, we explore some of the best stocks to hold, each offering unique advantages to help you grow your wealth and achieve financial independence.

MicroStrategy: A Shift Toward Bitcoin

MicroStrategy saw revenue growth at a modest 1% compound annual growth rate (CAGR) from 2020 to 2023. Expectations suggest a slight improvement, with analysts forecasting a 2% CAGR from 2023 to 2026. This growth is driven by the company's gradual shift toward subscription-based cloud services, which aim to compensate for the sluggish expansion of its on-premises software solutions.

However, the company transformed its strategy by focusing heavily on acquiring Bitcoin. As of the previous quarter, MicroStrategy held 226,500 Bitcoins, purchased for $8.3 billion at an average price of $36,821 per coin. With the current value of Bitcoin rising to approximately $12.9 billion, the cryptocurrency now represents nearly half of the company's enterprise value of $28 billion.

The company plans to continue its Bitcoin acquisitions, which could position MicroStrategy as a significant player in the crypto space if Bitcoin's value skyrockets in the future.

Some experts, including Chamath Palihapitiya and Jurrien Timmer, have speculated that Bitcoin could reach anywhere from $500,000 by 2025 to $1 million by 2038-2040. If these predictions hold true, MicroStrategy's stock valuation could rise significantly, potentially turning a modest investment into a substantial gain.

Procter & Gamble: A Reliable Dividend Growth Stock

Procter & Gamble is a solid choice for retirees seeking a stable income stream, with a dividend yield of 2.34%. The company has a remarkable track record of dividend growth, having increased its payouts for 68 consecutive years.

Its portfolio consists of well-known consumer brands, such as Head & Shoulders, Crest, and Pampers, which provide stable and consistent financial results year after year.

In its most recent fiscal years, Procter & Gamble has reported over $80 billion in sales and more than $14 billion in profit. With a payout ratio of 64%, the company’s dividend is considered manageable, ensuring its continued growth in the future. This makes Procter & Gamble a dependable and "boring" stock that income investors can hold with confidence.

Enbridge: High-Yielding Stability in Oil and Gas

Enbridge offers a high-yield investment with a 6.7% dividend yield, making it an attractive choice for those seeking strong returns without excessive risk.

Despite the global shift toward renewable energy, oil and gas remain integral to the world's energy needs, and this is unlikely to change dramatically in the near future.

This Canadian pipeline company has increased its dividend payments for 29 consecutive years, with another potential increase anticipated, and has been paying for about 70 years.

With a business model focused on fixed assets, Enbridge can maintain predictability in its cash flow. Though its payout ratio may exceed 100% due to depreciation costs, the company uses distributable cash flow (DCF) to evaluate the sustainability of its dividends.

In 2023, Enbridge reported a DCF of CA$11.3 billion, a slight increase from the previous year, underscoring its reliable financial performance.

Vanguard S&P 500 ETF: A Reflection of the U.S. Economy

The Vanguard S&P 500 ETF tracks the performance of the 500 largest U.S. companies, making it a benchmark for the overall health of the U.S. economy. By investing in this ETF, investors gain exposure to various sectors, including technology, healthcare, financials, and energy. Its broad diversification across industries makes it an attractive long-term investment.

Historically, the S&P 500 has delivered average annual returns of around 10%, with this particular ETF averaging nearly 14.5% since its inception in September 2010. Consistent monthly investments in the ETF could lead to significant returns over time, making it a great option for investors seeking steady, long-term growth.

Visa: A Profitable Leader in Digital Payments

Visa is a dominant player in the digital payments industry, benefiting from strong profit margins and a well-established market position. As the largest digital payment network provider, Visa facilitates millions of transactions daily, collecting a fee for each one. This highly scalable business model results in gross margins around 80% and net margins close to 50%.

Visa's strength lies in its network effect, as its payment platform becomes more valuable with each additional user and merchant. This competitive advantage makes Visa the go-to provider for businesses looking to accept card payments. Furthermore, the company sees a significant growth opportunity in replacing cash and check transactions, representing a $20 trillion market.

In addition to its core business, Visa's dividend has grown by 333% over the past decade, providing shareholders with an added incentive to hold onto this stock for long-term returns. Its dividend payments per share are an average of 15.56% over the past 12 months.

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.