Time for Spring Cleaning?
Analysts are stating that April is a great time to clean-up and maintain your trading portfolio.
Have you thought of creating or exercising new strategies and/or new stocks?
Though we are able to maintenance our portfolios anytime through-out the year, I believe now is a great time to take advantage of the market in looking for new strategies and what is trending.
The following 11 stocks are being sold out of many analysts’ portfolios:
—AFLAC (AFL) —IBM (IBM)
—CarMax (KMX) —Microsoft (MSFT)
—Chevron (CVX) —Seagate Technology (STX)
—Curtiss-Wright (CW) —UnitedHealth Group (UNH)
—Humana (HUM) —Wal-Mart Stores (WMT)
—Waste Management (WM)
Okay, so now that we know what the analysts’ think… Here is what I think.
I agree with dumping AFL, KMX, CW.
However, I would sell only ¼ of IBM, MSFT, STX, UNH at these levels and look for
a better price to get back in, further I would sell OTM covered calls on these stocks
for half of the original position.
Here’s an example: If I own 1000 shares of IBM, I would sell 250 shares,
then sell 5 OTM calls for the front month. This strategy accomplishes three things:
1. I get to take profits and reduce my long exposure.
2. I get to take in option premium while we trend sideways (this premium can be used to
buy more stock on a pull-back than just the ¼ I sold… Genius… I know!)
3. I still have 250 shares of long exposure just in case we continue up.
I would continue to hold WMT for the dividend.
And I would sell CVX and buy COP for the better dividend and growth potential.
How are you managing and protecting your portfolio now that we are sitting on huge gains for the year?
