How to retire in a volatile market

Lourens Coetzee is an Investment Professional at Marriott

The last few years have been particularly disappointing for investors due to below average market returns. As such, many savers are becoming increasingly concerned about not having enough capital to sustain their lifestyles when they retire.  This is a valid concern as most retirement plans are held together using capital growth assumptions that are notoriously volatile and proving to be unrealistic. 

Marriott endeavours to bring more certainty to retirement planning with our income focused investment style.  Unlike traditional retirement plans, Marriott’s projections are based on future income production rather than a future capital value. As income is a more certain element of return, Marriott has differentiated itself from other product providers due to its ability to provide investors with a more accurate projection of how much income their savings will be able to produce at retirement.

Bringing certainty to retirement planning with an Income Focused Approach

Marriott invests in securities and businesses that produce reliable income regardless of the economic conditions or market volatility. Typically, the type of investments that demonstrate this ability tend to be market leaders with strong brands and pricing power, boast robust balance sheets and cash flows, and produce goods or services that are integral to the lives of their customers.

L’Oreal, Coca-Cola, Clicks and Sanlam are typical Marriott investments that display all of the above characteristics which ultimately translate into reliable growing dividends over time as indicated in the charts below. There is a clear correlation between income growth (blue bars) and the capital growth (red line) over time. This relation follows a business truth where the value of a business grows over time at the rate at which its profits grow.  

Investing exclusively in reliable dividend-paying stocks is what allows Marriott to accurately project how much income their investors’ portfolios will generate in the future.  By considering the future level of income in today’s terms, it is possible to gauge early in a retirement plan whether contributions should be increased to achieve a desired lifestyle. Marriott has an intuitive online Investment Planning Tool to help investors monitor their progress and ensure that their retirement plan will be a success.

In summary, focusing on the income characteristics of an investment portfolio will significantly reduce the complexity and unpredictability associated with retirement planning. 

For more information on an income focused savings plan that provides investors with this information please visit Marriott’s website and try our simple and intuitive Investment Planning Tool.  

About Marriott Investment Managers

Marriott aims to create financial peace of mind through more predictable investment outcomes and personalised service.