If you’re one of the many investors counting on a 7% average yearly return from your portfolio — or better — you’re putting your retirement at risk. You’ve probably heard this 7% figure before. It’s gospel for many financial planners, and even Warren Buffett brings it up from time to time. It’s the S&P 500’s average annual return, adjusted for inflation, between 1928 and 2014. With a time frame like that, it seems like a safe bet, right? Wrong. Because over the next several decades, we’re way more likely see average yearly returns of 4% to 6%—and probably toward the lower end of that range.
Now we come to my two dividend growers to buy: With the market now recovered from its January flop, valuations are once again stretched—but not in the auto sector. Case in point: General Motors Company (GM), which trades at just 5.6 times forward earnings while offering a juicy 5.0% dividend yield. My second retirement pick is the Gabelli Dividend & Income Trust (GDV), managed by Mario Gabelli, a legendary value investor who launched his first mutual fund for the general public, the Gabelli Asset Fund, in 1986.
Source: InvestorPlace
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