Friday, February 25, 2011

Stocks I Purchased Today: Wellpoint (WLP, $66.38) and General Dynamics (GD, $76.02)

(May 16, 2011 update: All future stock posts will appear on my new subscription-only website at Please visit!)

Today I had some free cash in my stock portfolio account. I typically buy the same dollar amount of each stock, and I do not "double down" if a stock drops in price, nor do I buy more if the price his risen. I simply buy additional stocks, to increase diversity and therefore lower my overall portfolio risk.

First, I went through the list of stocks which I'd recently recommended, which were currently near good buy prices. Those included GD, WLP, JNJ, KFT, PRU, C, MCD, YHOO and AMAT. Then I reviewed their charts and dividends, to see which looked better than the others today. Those included PRU, KFT, WLP, YHOO, and GD.

Next I reviewed the industries in which I'm already invested. I'm overweighted in technology (computers, software, telecom) and consumer staples (cigarettes, toilet paper), and strong in finance (banking, credit cards), so I eliminated Prudential (PRU -- insurance), Yahoo! (YHOO -- online media/technology), and Kraft (KFT -- packaged foods).

I was left with Wellpoint (WLP -- health insurance) and General Dynamics (GD -- aviations; weapons). I chose Wellpoint over Prudential in the insurance category because Wellpoint looks like I can make a bigger percentage gain. They each pay decent dividends (WLP 1.5% and GD 2.2%). Those are the two stocks I purchased today.

I expect to sell Wellpoint near $90 and General Dynamics near $91, and I'll use stop loss orders to protect me on the downside. I do not fall in love with stocks and keep them forever. I invest to make money, then sell the stocks and move on to other stock opportunities. If stocks went up consistently, I'd keep them long-term. But stocks move in fits and starts, sometimes throwing more fits than an investor has the stomach for. I simply want to catch an upswing over the next few months, and make money.

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The Right Huff is Crista Huff's blog for politics and items of sociological or financial interest. Crista Huff also managesGoodfellow LLC, a subscription-only stock market website. We strive to identify financially healthy companies in which traders and investors can buy shares and earn dividends and capital gains. See disclaimer for the risks associated with investing in the stock market. See your tax advisor for the tax consequences of investing. See your estate planning attorney to clarify beneficiary and inheritance issues associated with your assets.


Anonymous said...

I do not think WLP will hit 90 anytime soon. it has stalled around 77.

Crista Huff said...

I sold it at $80 on May 12. It's just having a short-term correction. If it drops to about $73, I'll buy it back and make another 10% on the rebound within the current trading range.