Learn how to develop the best conservative portfolio for years of long-term investment growth. We even include a top blue-chip stock pick for you.

Investors creating the best conservative portfolio hold a group of stocks with the goal of achieving steady returns, including dividends, while maintaining a lower level of risk.

We recommend creating a diversified conservative portfolio of mainly high-quality, mostly dividend paying, stocks spread out across the five main economic sectors. Over time you’ll still experience a wide variation in results among your holdings, but you’ll find that at the worst of times, you won’t lose much by holding a portfolio answering that description.

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McDonald’s Corp., symbol MCD on New York, is the #1 Conservative Buy for 2022 and a solid edition to the best conservative portfolio

McDonald’s is the world’s largest fast-food chain with 40,031 restaurants in 119 countries. It serves a wide variety of food but is best known for its hamburgers and french fries.

The company accounts for roughly 4% of global fast-food restaurant sales, which is twice that of its nearest competitor Yum Brands (the operator of the KFC, Taco Bell and Pizza Hut chains).

In 1940, brothers Richard and Maurice McDonald opened their first fast-food hamburger stand in San Bernardino, California. Over the next few years, they let others copy the concept under franchise deals.

Businessman Ray Kroc purchased the firm from the McDonald brothers in 1955 and established the current company’s “asset light” business model.

Under that plan, the company is responsible for buying the land and building the restaurant. It also supplies the food and pays for advertising and marketing. In exchange, franchisees pay an initial fee to McDonald’s, as well as ongoing rental and royalty payment based on a percentage of their sales. They are also responsible for occupancy costs, such as property taxes and maintenance.

These franchise agreements generally run for 20 years. After the contract expires, McDonald’s still owns the land and building. Franchisees can agree to renew for another 20 years, or the company can sign up a new franchisee for that location or close the restaurant.

In 2021, rents from franchisees accounted for 36% of McDonald’s total revenue, while royalties supplied a further 20%. The remaining 44% mainly came from company-owned restaurants and other sources, such as licensing its brand to makers of consumer products.

In 2022, McDonald’s plans to open over 1,800 restaurants (or 1,400 net of closures) worldwide. The International Developmental Licensed Markets division will account for 1,300 (or 72%) of those new outlets. The remaining 500 stores (28%) will be part of the U.S. and International Operated Markets units.

In all, McDonald’s plans to spend between $2.2 billion and $2.4 billion on new stores and upgrades to its existing locations in 2022. About 40% of that new spending will go to its U.S. division, mainly for store upgrades. This year’s plan is also up roughly 13% from its 2021 capital spending of $2.04 billion.

Consider these five tips while selecting ideal stocks for the best conservative portfolio

• Be skeptical.
• Understand compounding. It’s an important part of how your personal wealth grows.
• Seek dividends in your investments.
• Be very cautious of advice that comes from advisors or institutions that sell insurance or other fee-heavy investment/financial products.
• Only buy bonds or other fixed-return investments if interest rates are high enough to make them attractive.

Invest in blue chip stocks and you will have some of the top conservative investments working to make the best conservative portfolio profitable

At TSI Network we feel that stocks that have been paying dividends for over 10 years are some of the safest investments you can make. Dividends are a sign of quality and a company’s financial health. Types of stocks that we consider to be safer investments include Canadian banks and utilities.

There are also a host of other key indicators to determine if a stock is a safer investment, like management integrity, its growth prospects and its stock price in relation to its sales, earnings, cash flow and so on.

For a true measure of stability, follow our Successful Investor approach and focus on those companies that have maintained or raised their dividends during economic or stock-market downturns.

All in all, we think investors will profit most—and with the least risk—by buying shares of well-established, dividend-paying blue chip stocks with strong growth prospects.

Use our three-part Successful Investor approach for all of your investments, especially while building the best conservative portfolio

1. Hold mostly high-quality, dividend-paying stocks.
2. Spread your money out across most if not all of the five main economic sectors: Manufacturing & Industry, Resources & Commodities, Consumer, Finance and Utilities.
3. Downplay or stay out of stocks in the broker/media limelight.

Do you believe that controversial stocks are good for building a conservative portfolio over time?

Do you stick with a conservative portfolio or do you include more speculative stocks in your investing strategy?