In a few minutes, I’m going to show you five of my favorite penny stocks that offer something I call a “Retirement: Plan B”. Before I get into that, let me touch on a very important topic few think about when investing…

When you put money into a stock, what’s the number one thing you always think? If you answered, “I hope this one goes up,” then you think like 99% of the investors. That’s fine. Most investors will always think that way.

Today, I’d like to introduce you to the other 1%. The few that fall into this group have one thing in common: they demand their gains. For them, hoping isn’t always good enough.

Into the Psyche of a “One Percenter”

If you’re like me, you have strict demands for your hard earned money. 

If your cable goes out, you call the company to make certain the problem is fixed. You wouldn’t pay the bill if your service weren’t working. The same goes for the other expenses in your life. If your cell phone bill showed a strange $200 charge, you would call your provider and have it removed.

And as much as you shouldn’t pay for problems beyond your control, you should also be compensated for your foresight. Let’s say your best friend asked you for $5,000 to start a business. If you see that his business is booming a few months down the road, wouldn’t you say: “Hey, I deserve some of that?”

If this sounds like you, you might have the perfect “one percenter” attitude. And if you care about your money and what you receive in return for it, you are definitely a “one percenter.”

So why don’t you invest like one?

Introducing “Retirement: Plan B”

When buying a stock, a “one percenter” never thinks, “I hope this one goes up.” It’s simply not his first concern…

No, a “one percenter” is not asking too many questions. He already knows what his return on investment is, how long it’ll take, and how he can spend that money. He’s an income investor.

By income, I mean real investment plans that actually pay you. Most investors aren’t even aware you can invest like this.

These plans are very similar to classic pension plans… except, you don’t have to work for these companies. That’s why I call plans like this: “Retirement: Plan B”.

There’s a lot more to it than just sneaking onto a company’s pension plan. You can actually choose how many you want to pay you. You can start and stop them at any time without early withdraw fees. And, a few of these Plan B companies even match your investment as if you worked for the companies.

Now, you might think only a mega corporation could afford to do something like this. While the list of 987 Plan Bs does include the likes of ExxonMobile, Microsoft, and Wal-Mart, the majority of Plan B companies are small caps (under $1.5 billion market cap). And many of these trade for less than $10 a share, which makes them true penny stocks.

As promised, here are five of my favorite penny stocks that offer the Plan B:

• Kelly Services Inc. (NASDAQ: KELYA) – temporary staffing company, which provides over 750,000 people with jobs annually.
• Myers Industries Inc. (NYSE: MYE) – plastic moldings and rubber parts manufacturer.
• Insteel Industries Inc. (NASDAQ: IIIN) – steel wire reinforcing products for infrastructure projects.
• Alumina Limited (NYSE: AWC) – international alumina and bauxite miner, with limited smelting operations.
• World Wrestling Entertainment Inc. (NYSE: WWE) – a leader in wrestling media.

Unfortunately, it’s not as easy as buying shares of these companies. Instead, you have to set up the plan. It should only take three minutes, but you have to know what to ask for.

Sincerely,
Jim Nelson

February 9, 2009

Jim Nelson

Jim Nelson is the managing editor of Penny Sleuth. He has been playing the stock market since he was 14, always with a preference toward smaller companies. He has honed his stock picking skills at Agora Financial since 2004, effectively combining a growth and value approach. Like Greg Guenthner, Jim also contributes to Penny Stock Fortunes on top of bringing you the Penny Sleuth every weekday.

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