Our 3 Top Retirement Stock Picks for 2023
For many investors whose retirement is looming on the horizon, it’s important to ensure one’s retirement savings are wisely allocated. For those looking for the best retirement stock picks for 2023, you have come to the right place. Investing in well-designed market leaders or up-and-coming innovators can help ensure long-term growth in retirement accounts.
Of course, it’s easier said than done. There are plenty of value traps out there, and blue-chip companies that have lost their winning ways.
That said, investing in consumer goods companies has proven to be consistently profitable year after year, thus providing a solid base for retirement portfolios. Making similarly wise retirement stock picks for 2023 can lead to financial security for years to come, even after retirement.
The year thus far has been marked by a sharp selloff in the broader market. At the time of writing, the Dow Jones Industrial Average has gone down 8.17%, and the S&P 500 has lost 17.83% year-to-date. However, this is not the time to panic. By all indications, we should see the back of the bear market next year. Until that happens, though, attractive retirement stocks will remain cheap. As we head into 2023, now is the prime time to strike.
Over the past few years, Microsoft (NASDAQ:MSFT) has slowly but surely transitioned from a growth stock to a reliable performer. Although retirement investors would not traditionally pick up stock in Microsoft due to its past volatility, there are signs it is becoming more of a legacy company with steady gains and minimal drops.
Investors should exercise caution when looking for retirement stock picks for 2023, and consider some allocation to industry giants in their portfolios. With careful monitoring and wise allocations among the companies, retirement portfolios can benefit from Microsoft’s steady growth and reliable performance.
That is not to say the tech giant is not growing. Microsoft’s Azure stands in second place in the global cloud infrastructure market. Alongside Amazon (NASDAQ:AMZN) and Google, the company accounted for two-thirds of cloud infrastructure revenues in the third quarter. As the market is still growing, this segment represents the future for Microsoft.
In addition, Microsoft’s diversified business model includes developing numerous products and services, ranging from software products to consumer electronics and the cloud. Not only is this model ideal for those seeking a retirement investment well-equipped to endure any market turmoil, but it helps Microsoft to remain a top contender in an ever-changing industry. With such a surefire approach, Microsoft stands out as one of the premier retirement stock picks for many investors come 2023.
Berkshire Hathaway (BRK.B)
Berkshire Hathaway (NYSE: BRK.B) is a world-renowned investment firm founded by Warren Buffett in 1965. Over the decades, it has become one of the most secure retirement stock picks. I think that this stock will remain so for 2023 and beyond, with many long-term investors profiting from its stable investments in blue-chip companies.
Berkshire Hathaway also operates very leanly with minimal oversight, allowing it to control its own investment decisions without any restrictions, and navigate times of market uncertainty without relying on outside sources. This makes it an attractive retirement option for those looking for safety, yet still seeking a return on their retirement savings over time.
The Wall Street legend delivered again in the third quarter, with operating earnings rising 20% over 2021. Although the investment firm reported a loss of $2.7 billion in the third quarter, operating earnings is a fairer metric that removes the volatility it suffered due to the market downturn.
Despite the turmoil in the broader markets, operating earnings jumped 19% in the year thus far. Insurance underwriting and the company’s railroad business emerged as the portfolio’s biggest losers this report. However, share repurchases helped stem the negative momentum to some degree, ensuring the investment firm ended the quarter in a healthy enough shape.
Berkshire Hathaway’s unique ability to take advantage of time arbitrage has been invaluable in creating and sustaining shareholder value through any economic climate. By being able to make decisions based on the interest of long-term value rather than short-term performance pressures, Berkshire Hathaway has proven its worth again and again. Comprehensive research and thorough analysis are just some key factors that have allowed this company to be such an effective retirement investment. Its recent results confirm it is an all-weather investment.
Visa (NYSE:V) is a global electronic payments network. It allows consumers and businesses worldwide to make payments and send money with just a few clicks. Thanks to the world’s largest retail electronic payment network, it is one of the top retirement stock picks for 2023. With countless retailers across the globe who accept Visa, investing in its brand could provide valuable returns in the future.
By taking advantage of potential growth areas like online debit and credit card use, Visa could experience tremendous growth over the coming years. This makes it a key retirement stock pick, as its success should provide short-term investment gains and long-term retirement security.
Despite recent macro headwinds, Visa is executing well. It has posted exceptional performance, thanks to a post-pandemic resurgence of cross-border transactions and travel. Constant-currency cross-border transaction volume, excluding intra-Europe, saw a 49% increase in fiscal Q4. The large-scale adoption and increased usage of cashless payment methods also contribute to Visa’s success.
Analysts expect this trend to continue over the coming quarters, as Visa is well on its way to becoming one of the top retirement stock picks for 2023. It appears that Visa is poised for sustained growth, barring any major economic downturns.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.
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