Retirement planning for IRAs, SEP IRAs, Roth IRAs, 401ks, etc...should include small cap stocks such as Portland General (NYSE: POR), Bank of Kentucky (NASDAQ: BKYF) and Winthrop Realty Trust (NYSE: FUR) as they are ideal for all retirement accounts.
There are many reasons for this: income for a retirement account from a high yielding stock is a major one. Portland General is a utility operating in Oregon. Bank of Kentucky is a financial institution that focuses on northern Kentucky and the greater Cincinnati area. Winthrop Realty Trust invests in real estate in major urban areas on the East Coast. Each pays a strong dividend, which should play a role in retirement planning for all. In addition, dividend income is tax free in IRAs, Roth IRAs, 401ks, etc…. so high yield small cap stocks should be part of all retirement planning This tax free status enhances the value of a high yield stock.
The high yield feature of each stock also manifests the shareholder friendly culture of the management of Bank of Kentucky, Portland General and Winthrop Property Trust. This is a critical aspect of any stock, but often overlooked in retirement planning. The stocks in your 401k, IRA, SEP IRA, Roth IRA, et al… should be those that look after the interests of the shareholder first. Your retirement plans should have no surprises such as that of realizing that stocks in your retirement account are not well managed and operated to benefit only the C level executives.
As Winthrop Realty Trust, Bank of Kentucky and Portland General are small caps, they are not followed as closely as the major companies in their sector. Yet, they will rise and fall with the fortunes of the “Big Boys.” This is a tremendous opportunity for the small cap investor to accumulate these shares at lower prices for their retirement accounts. By following the small cap, retirement investors will know that they company is still solid even though all shares in that sector are being battered. As an example, Bank of Kentucky still posted strong financials during The Great Recession but its share price slid along with the money center banks. Banks such as Citigroup (NYSE: C) lost heavily due to subprime lending, mortgage bank securities and other unwise moves that the Bank of Kentucky would never consider.
Retirement planning should include high yielding small caps that are well managed. A dividend income is tax free when the stock is held in an IRA, SEP IRA, Roth IRA, 401k, et al…. Researching and following well managed small caps with strong dividends such as Bank of Kentucky, Portland General and Winthrop Property Trust should be a major part of everyone’s retirement planning.