Investing in the US Market for Retirement: Stocks and Funds to Consider
3 min read
Saving for retirement in any country—whether it be the US or the UAE—means making your money work for you. You want to build wealth that will last you in your later years, and interest-yielding savings accounts can only do so much.
The stock market is a place that brings better returns, so stocks and funds can help you reach your retirement goals more easily. As 12% of Dubai's population approaches retirement years over the next decade, younger folks in the Middle East are realizing the best time to start planning is now.
Which retirement stocks and funds are best for your portfolio?
You won't have a diverse array of funds and stocks saved for retirement right off the bat. However, diversification should be your long-term goal. Start small and dip your toes into different sectors, industries, market cap sizes, fund types, and other equity variations.
Consider target date funds, mutual funds, and ETFs
Target date funds are a category of US funds that specifically cater to retirement planning. For example, some millennials will retire around the year 2060, so the Fidelity Freedom Index 2060 Fund (FDKLX) would be one good option.
Mutual funds also offer built-in diversification. They track an index to match the market's performance, not beat it. The Pimco Income Fund (PIMIX) is good if your retirement is coming up sooner. The T. Rowe Price Retirement Balanced Fund (TRRIX) is another broad asset collective.
If you're outside of the US, make sure the TDF or mutual fund you want is available for international trading.
For young investors thinking about retirement, the real fun comes when you discover ETFs. You can trade exchange-traded funds with your brokerage like a regular stock, too. The core ETFs for any retirement portfolio are:
SPDR S&P 500 ETF Trust (NYSEARCA:SPY)
Invesco QQQ Trust Series 1 (NASDAQ:QQQ)
SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA)
You can also get more thematic with niche ETFs like the ARK Innovation ETF (NYSEARCA:ARKK), First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR), and Amplify Transformational Data Sharing ETF (NYSEARCA:BLOK) – just to name a few.
Save for retirement with blue-chip stocks and other stocks that have been public for awhile
You can also sprinkle in some individual stocks in your retirement fund for a little bit of excitement. Stocks with history on the market tend to be less risky than startups or trend stocks.
For example, big tech stocks like Netflix Inc. (NASDAQ:NFLX), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOGL) are all doing particularly well as of July 2021. Plus, they've been publicly traded for about 20–40 years. This gives future retirees a sense of security that their investment will continue building returns until the retirement day hits.
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