What a Girl Wants: Options

This is part of a series of profiles highlighting women investors in the Fool community. Find out what makes the fairer sex better at picking stocks at fool.com/girl.

When nurse Allison Karrels, 34, (airforcemama20 on the boards) decided to make her first stock trade, she jumped in with a covered call on Intel.

"I wanted to dive right in," she says, "and options really intrigued me." Her bold move paid off, and she continues to use options for income alongside her more traditional long positions in blue-chip companies that she can "hold forever." Read on to learn more about Allison, including what she's buying right now.

When did you first get interested in investing?
I was exposed to it a little growing up. My dad taught me the basics of compound interest and savings, and I remember looking at tickers in the newspaper with him. Then I married an Air Force officer who travels a lot, so I was put in charge of the finances. I work three days a week, so I used those two days off to learn everything I could. Eventually, I subscribed to Motley Fool Options, then Motley Fool Pro, and started following along with their trades.

How would you describe your investing approach?
I'm not much of a risk-taker. I try to get as many great stocks as I can find, then look for options trades to layer over them. It helps force some discipline. I've done well with picks like Apple (Nasdaq: AAPL  ) , which has probably been my biggest investment success so far. Nobody's going to touch Apple for the next five years. I also just keep adding incremental cash through dividends and covered calls.

What's been your biggest investing failure?
Well, Rosetta Stone (NYSE: RST  ) crashed a week after I bought it, but I want to let it play out. Other than that, I have some stocks that are down, but no major losses.

In our upcoming book, Warren Buffett Invests Like a Girl, we make the case that women are better suited temperamentally to be great investors – they are generally more patient, take less risk, stay calmer in turbulent markets, do more research, and hold for the long term. Do you think you invest like a girl?
I definitely look at the long term. I have decades to go! I probably trade a little more often because of my options strategies, and I check the market daily, but I don't stress about it at all. I trust the recommendations from Options and Pro, but I will read up on companies I don't already know.

Any advice for women looking to get started?
Find an area you're interested in. I'm a nurse, so I was originally drawn to medical companies. Don't worry about daily fluctuations if you're investing for the long term. And learn as much as you can!

Finally, what stocks are you buying right now?
I just bought Seaspan (NYSE: SSW  ) and J&J (NYSE: JNJ  ) for my husband's account. Although Seaspan is down recently, I really like its story going forward. It will have 18 new ships on the water in 2012, which are already matched to long-term contracts. Plus, it pays a nice dividend, which I expect to increase over the next five years as that increased income kicks in and the stock price rises. J&J is just an all-around great stock. The recalls this past year have pushed the stock price too low. I don't think people give J&J enough credit for its drug pipelines and worldwide presence.

I also like Amtrust (Nasdaq: AFSI  ) and Medtronic (NYSE: MDT  ) . Amtrust is a multinational insurance company that most people don't know. It focuses on workman's comp and extended warrraties on goods. It has run up quite a bit this past year, but it still has room to grow. Medtronic is a favorite medical stock because I work with its products in the hospital so much. They are used more than any others I see in the cardiovascular area. The stock price has declined recently with the CEO change and some FDA issues, but with its emphasis on innovation ($0.10 of every sales dollar goes into R&D), I have faith in this company.

Plum Creek (NYSE: PCL  ) is another favorite. It's a timberland REIT that pays a nice dividend. I like that it is diversified around the U.S., so it can harvest areas when prices are high and let other land mature in areas where prices are undervalued. I think the management team is one of the best around, with its long-term approach to the land it owns and the stock's value.

Want to learn more about how to invest like a girl? Warren Buffett Invests Like a Girl is available June 21, but you can get chapter one today for FREE.

The Motley Fool owns shares of AmTrust Financial Services, Johnson & Johnson, Apple, Medtronic, Seaspan, Rosetta Stone, and Plum Creek Timber, and has written puts on Plum Creek Timber. Motley Fool newsletter services have recommended buying shares of Apple, Rosetta Stone, and Johnson & Johnson, and creating a bull call spread position in Apple, a write covered straddle position in Seaspan, and a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days.

Robyn Gearey does not own shares of any company mentioned here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On June 09, 2011, at 4:06 PM, RockyTopBob wrote:

    Ali, as we know her, is one of the bright spots on the PRO boards. She is quick to help out where she can. You absolutely have to respect her profession. I wish my wife was as financially "with it" as Ali is :-)

    Way to go Ali. Stick around forever.

    Regards,

    Bob

  • Report this Comment On June 09, 2011, at 7:30 PM, midnightmoney wrote:

    invest like a girl thing is getting old. I'd like to know if the person being interviewed is making intelligent decisions, not her gender. Anyway, what the woman interviewed here has said doesn't necessarily distinguish her as a woman or a man--to me she sounds like most motley fool articles (to wit, peruse articles about johnson and johnson)--so I was glad to see that she kind of brushed the question as to her girlishness aside. Long gripe short, I think I don't come to the mf to look for advice that would seem to have been written by a woman--just good advice.

    Out of entirely idle curiosity, how many women y'all got working in advisory roles on the different newsletter services? How bout a male:female ratio? I assume there are more males working the rulebreaker ropes, given that women take less risk than men.

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