No savings at 40? I’d buy these 2 FTSE 100 shares to get rich and retire early

I think these two FTSE 100 (INDEXFTSE:UKX) stocks offer bright long-term outlooks.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Having no savings at age 40 does not necessarily mean that you will be reliant on the State Pension in older age. There is still time to build a surprisingly large retirement nest egg through, for example, buying a range of FTSE 100 shares today.

In many cases, large-cap stocks offer improving financial prospects that could enable them to deliver rising share prices.

With that in mind, here are two FTSE 100 stocks that could be worth buying today and holding for the long run. They could help to bring your retirement date a step closer.

Burberry

Burberry (LSE: BRBY) released a trading update on Friday to provide details of the impact of coronavirus on its performance. Currently, 24 of its 64 stores in Mainland China are closed due to the outbreak of coronavirus, while many of its other stores have restricted trading hours. In addition, footfall to its open stores in China is weaker than expected. As such, its financial performance could be negatively impacted in the short run.

While this may mean that the company’s share price comes under pressure in the near term, it could present a buying opportunity for long-term investors. Burberry has put in place a refreshed strategy over the past couple of years that has focused on cost reductions, investing in social media marketing, a move to a more ultra-luxe positioning, and becoming more sustainable. It has also released a refreshed range of products that is proving popular with customers.

Therefore, its long-term growth potential seems to be bright. It could be worth buying following its 15% share price decline in the past three weeks, with it seeming to offer a margin of safety alongside growth potential as it implements its revised strategy.

BAE

Another FTSE 100 stock that could offer long-term price appreciation is BAE (LSE: BA). The aerospace and defence company recently reported that it has made two acquisitions that could strengthen its growth potential over the long run.

In addition, its most recent trading update confirmed that it was on track to meet its financial guidance for the 2019 financial year. In 2020, it is due to post a rise in its bottom line of 4%, with growth of 9% expected in 2021. These figures would represent an improvement on its recent past performance, where budget cuts and an uncertain economic outlook have caused the wider defence sector to experience a challenging period.

BAE currently trades on a price-to-earnings (P/E) ratio of 13.7, while it has a dividend yield of 3.7%. These figures suggest that it could offer good value for money at the present time, and may be able to deliver further stock price growth following its 25% gain in the past year. As such, now could be the right time to buy a slice of the company while it still appears to offer a margin of safety.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of BAE Systems. The Motley Fool UK has recommended Burberry. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »

Investing Articles

2 FTSE dividend shares yielding more than 6% with P/Es of less than 9!

Harvey Jones picks out two brilliant FTSE 100 dividend shares that yield more than 6% but are selling at strangely…

Read more »

Investing Articles

Up 105% in a year! Is this rocketing FTSE bank the perfect pick for my Stocks and Shares ISA?

Harvey Jones is drawing up a shortlist of stocks to purchase inside his Stocks and Shares ISA allowance. This FTSE…

Read more »

Investing Articles

Down 78%, is this once-hot AI growth stock set to explode like the Rolls-Royce share price?

Our writer asks if he should invest in Super Micro Computer (NASDAQ:SMCI) following the growth stock's massive recent decline.

Read more »

Investing Articles

Is it madness to buy Palantir shares after Q3 earnings?

Palantir stock's surging again after the firm's Q3 earnings report. But after a 150% gain, is it too late to…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

£6,000 in savings? Here’s how I’d aim to turn that into £1,032 a month of passive income!

A small investment in high-dividend-paying stocks with the returns used to buy more shares can generate big passive income over…

Read more »

Chalkboard representation of risk versus reward on a pair of scales
Investing Articles

As Lloyds’ share price tumbles 14%, is this an unmissable opportunity for me to buy at a bargain-basement price?

The Lloyds share price is substantially below its year high, but decent earnings prospects should drive its price and dividend…

Read more »