Purchases Week of June 8, 2014

Below is a list of stocks that I purchased this week. I had many small orders since I still have dozens of free trades I need to use up before mid September.

The theme for this month is safety and low volatility. I am extremely cautious right now as the S&P500 gets higher and higher and the VIX gets lower and lower. Investors should exercise caution in making sure their investments are of good value. The stocks I purchased this week are what I consider sleep well at night (SWAN) picks. MCD, MO, WMT, and GIS are the safest stocks in this week's purchase list. I believe that even during a recession, these stocks will continue to pay their dividends. 

Since I am still young, a market correction does not worry me since my portfolio balance is still very small and a negative capital gain can be easily offset by my monthly contributions. My goal for the current market situation is to buy stocks that provide growing dividend and capital growth in the past, and are functional businesses during market corrections. The stocks in this week's purchase all have had minimal losses during the subprime crisis, 9/11 attack, tech bubble, and the Asian financial crisis.

McDonalds (MCD)

The stock is fairly priced. It has taken a dip recently. Yield is over 3.2% when I bought it which is on the higher side of stocks I have now. I like this company because it has very low volatility during recessions. The stock has been sideways for several months but I am not concerned over its short term capital gains.

Altria (MO)

The stock is slightly overpriced but I wanted to increase my position to a full position. I bought after the ex-dividend date when the stock took a 3% dive. I believe MO will continue paying growing dividends. The stock has low beta so it is one of the safer stocks to hold during a crash. I bought this stock with the understanding that capital gains will most likely be unexciting, since MO is at all time highs. I bought this stock for its dividends and stability. The yield is 4.63% when I bought it, making it one of the highest yielders in my portfolio.

Walmart (WMT)

I bought WMT after the recent dip. The yield is 2.55%. The company still operates well during a recession so I consider this another safety stock. I believe I bought it at fair value. This stock is low beta and many customers will still shop at Walmart when their stocks lose half their value during a depression.

Genuine Parts Co (GPC)

I added to my shares of GPC. Not much excitement for GPC as it's been flat for a long time. The stock offers a decent 2.7% and has been paying increasing dividends for many decades. I believe I bought this stock at fair value. The stock is slightly more volatile with a beta of 0.72 when compared to my other portfolio picks. However it is still a safe bet compared to a S&P500 index.

Ross (ROST)

I added to my small position in ROST after it dropped even further. The stock is a low yielder but has lots of growth. I believe this stock is undervalued. I have more faith in ROSS than TGT since ROSS has a much more solid balance sheet over the last 10 years.

TJX (TJX)

Same with ROSS, I added to this stock after it dropped further. This stock is undervalued. I pair my TJX investment with my ROST investment since they're nearly identical. My total cost basis for TJX and ROST now stands at around $2000.

General Mills (GIS)

The stock is slightly overvalued. I bought into it after a small dip. The stock is a 3% yielder with extremely low beta. I am holding this stock not for capital appreciation but for its stability and solid dividends.

The current stock portfolio weights are shown below. Apple is a bit over-allocated for my taste. I intentionally have a large allocation tobacco (PM and MO). I also have a large allocation to Kinder Morgan (KMI+KMR) which is intentional. JNJ and CHD are companies that I believe will always be solid dividend payers, with CHD being more of a growth stock. TJX+ROST count for 8% of the portfolio. These two stocks are growth stocks that have extremely solid balance sheets over the last 10 years and have recently gone on sale due to the "cold winter". The other stocks in my portfolio are of normal allocation.