Have this in my IRA have time to ride this out after buying in at 16.91. Would it better to sell And take the loss, or reinvest the dividends.. and hope in a year or so it will break even? I wish I was Irish because I can use all the help/luck I can get here. The last week and especially today has made me wonder if I will be in the bread lines when it is time to cash my IRA out.
IS THIS WHAT I GET FOR LISTENING TO LEN WALTERS ON CHICAGO'S WWBBM FIANACIAL MAEKETS RADIO????????? IF SO, THANKS A LOT LEN WALTERS..... SHOULD HAVE STUCK WITH BRK.B................
if you hold for a year and div.remain about same and stock price remains about same then you wont have a loss. if is the big word.you cant write off a loss in your ira.this loss if you sell is money lost forever.
<<if you hold for a year and div.remain about same and stock price remains about same then you wont have a loss.>>
Duh, this is true for any investment. Let's look at the facts: declining distribution and declining stock price, the first is driving the second. Pull up a 1 year chart of NLY, it does not look like the decline is over.
<<if is the big word.you cant write off a loss in your ira.this loss if you sell is money lost forever. >>
Oh this is ridiculous. Don't take a loss in your IRA? Ever? No matter how much a stock goes down? No matter how much you lose? Wealth destruction can happen even in a tax deferred account. Take your loss and move on to something with increasing distributions. And the OP needs to learn about how to execute his own trades like it is his own money.
Have 1300 shares in regular account with a $2K loss and am considering buying 2,000 shares for my IRA later this year. Declining payout should/may cause the stock price to go below $15 maybe even $14. Though is tempting to purchase now am waiting for the 'market' to continue to panic sell. NLY has weather bad times before and still was able to pay out a reasonable % compare to overall market. This stock is NOT a capital appreciation long term, expect for the short holders. IMHO hold for long term in IRA for payouts.
I have not been in reits long enough to disambiguate the fine points of their accounting, but I know that you want to own companies with strong and proven management. That's NLY. AGNCs performance has been outstanding, but they are only a toddler, and have no down market experience.
by the way that 153 million shares that real earnings were based on... at the end of the year AGNC actually had 224 million shares, (that was before the recent 71 million SPO)
all of which are earning "less spread" than last year. someone is going to wake up eventually and notice. then it gets... interesting.
something is going to give... and give hard.... and it is not going to be pretty.... especially for those soft in the head investors who are looking for further capital gains on AGNC rather than AGNC dividends. AGNC can keep with the "previous sales of MBS" for only so long before they run out of things to sell. while they are supposed to be in the "spread" business.
cont next post.
it is less than the $7.89 they earned per share the year before, and the $6.78 they earned before that....
so while "REAL" Earnings are coming down quickly, their current pay out equals $5.00... while they earned $5.02 during the best spread market there ever was, well except for the year before that.... so if spreads contract at all... which they have been, AGNC will have to cut earnings sometime next year as their "cookie jar" of old earnings runs out....(that they are using to prop up current dividends.)
cont next post
so of the $824 million AGNC actually earned on the spread or the "REAL" earnings. They declared earnings of $5.02 per weighted average number of shares.. yet paid out $5.60. To top that off that $5.02
cont next post..
I bought some NLY shares right after the ex dividend and later sold for a breakeven. I then diversified into AGNC, MTGE and ARR after there SPOs. I am 75% Mreit long, with 55% AGNC, 30% MGTE, 10% ARR and 5% NLY.
Honestly I hold NLY because it is the biggest and management's ability to navigate the great recession (respect). NLY has plenty of available leverage and shares authorized (drip selling). With operation twist ending, sometimes I think they have something up there sleeve and surprise. Other times I think they spend too much time selling previous MBS purchases and managing risk.
NLY is a tough call especially when you listen to the conference call and end with more questions than answers. AGNC still has room to grow and is aggressive. They cut there dividend yet the stock price popped ?!. I like MTGE because it is a young Mreit and seemingly very good management. AAR's management has a questionable history however you can not argue with the dividend rate. All these companies do the same thing except MTGE is slowly diversifying into higher yielding non gov insured MBS.
I think if I were you, I would consider a deep cut in my NLY position, look for good entry points in AGNC and MTGE and the rest as dry powder. JMO GL
-----Other times I think they spend too much time selling previous MBS purchases-----
AGNC reported $1.149 Billion in "earnings" last year.... including $1.029 billion of "unrealized" gain from previous MBS purchases, and $473 million of "realized" gains on previous MBS sells...
be careful what you wish for.... or in your case, didn't wish for......
Sell and invest in MTGE or AGNC. Stable PPS, stable Earnings, stable dividend. MTGE gives you the added bonus of increasing dividend( probably 1.00 next), and capital appreciation.
So you lose 1.00 on NLY. By June EX for MTGE, the PPS will be minimum 22.50, and you get your 1.00 back in the dividend. It is the same management as AGNC and follows the same program with a small % of non-agency to boot.
Or I'll tell you to do the same thing in May with the NLY PPS still in the toilet and the next divi at 51 cents. Earnings is a nightmare for NLY that will not easily be overcome. (easily meaning Not).
Your choice, bail now and go with a winner or suffer more pain...your choice...