Paul, i think you're smokin crack. I'm sure you bought at $35 in 2011 and can sell now for $19 and still show a 6% return. Negative 6 maybe. And you can get that return from a good bond fund with little or no risk.
I think you should crunch some numbers again.
I bought back in 2011 and later, some at $35. With the dividends I have received I could sell now and even with the capital loss still have gotten a 6 % return. Short termers are always complaining when they haven't doubled their money...
From an article on Seeking Alpha with the same name as this topic post:
American Capital Agency is primarily invested in the 15-year and 30-year MBS. I’m expecting losses there.
The interest rate swaps AGNC is using should offset some of the losses as the yield curve steepened.
Because low rates on MBS extended through April, there may be some CPR impacts still happening in the early part of Q3.
The amortization charges for the quarter will likely cover any expected prepayments for July that are resulting from the lower rates in the early part of the quarter.
During the last month of the quarter MBS rate increased significantly, which increased the expected loss for the quarter but also justifies lower amortization charges in the future.
American Capital Agency Corp. (NASDAQ:AGNC) is an mREIT with a focus on investing in fixed rate Agency MBS. The major exposures from their asset portfolio are the 15-year and 30-year securities. With the second quarter done and plenty of data available for analysts that know how to find it, it is time to look into the expectations for the quarter.
One of the reasons investors need to understand these movements is that people are constantly quoting the "price to book ratio." That ratio is useful, but it is important to understand that the price to book ratio is generally based on old data for the book values. When the book value has changed meaningfully, the discount to previously reported values are questionable at best and misleading at worst.
The article is significantly longer and contains charts and graphs. You can search the title of the post in google/yahoo or use the link below (if it still functions)
Interest rates will not go up more than 1/2 point over the next 12 months. It's not like the old days when they would go up 1/4 after 1/4er for several full points. AGNC will go up to $25.00 over the net 12 months.
This is true for all stocks which pay a dividend. The price per share drops by the amount of the dividend. Then trading can carry the pps up or down from there.
One of the reasons that AGNC went to monthly dividends rather than quarterly was to smooth out the price fluctuation which accompanied distribution of dividends. There was a whole school of traders who would buy a few days after the dividend and sell a few days before the next dividend. They would make their profits from capital gains rather than from the dividend.
The accrued dividend is included in the share price. The share price will usually drop by the same amount as the dividend on ex-div date. Also the dividend is not fixed like bond interest. Each quarter the board of directors decides what the current quarter's dividend will be.
This is probably a stupid question in a sense, but I'm new to trading bonds, and so forth. Like municipal bonds. Does AGNC price reflect the amount given out per each div.? Such as, does the div. percentage given change based on total base pps per the time of when the div. is given each month?
Jumped .60 cents in one day last week, only to give it all back over the next three days. BAD SIGN,NO SUPPORT LEVELS HERE. Forget about stock price appreciation. Maybe in five years from now in a different enviorment.
Lets think before we post here.
1. The flag was flown over the SC capital starting in 1961.
2. It was flown as a sign of Protest over de-segregation.
If it had been flown since the end of the Civil war, you have some logic.
Since it is a sign of Racism, it needs to come down.
I am an independent conservative.
But It feel Racism has no place in our society.
Racism form any group (black, white, Latino, etc ) need to go now.
The N-word doesn't seem to offend the Reverend J. Jackson, or people of color, they seem to have no problems using it , but if a whittee use it, well my its the end of the world, just move forward after 150 years my family didn't have anything to do with slavery & I'm tired of being held accountable for gang banger shootings & Detroit 75% High School drop -out rates see bob, time to get a life & move on!
Yeah, not only fly that Southern Swastika; but use the n-word too - another harmless expression of hate.
Why hide it??? Proudly display your hate like your ancestors did. Wear it like it's a badge of honor.