Are there any other Reits or cefs, that any of you are aware of, that pays monthly around the same percentage that ARR does? Or know where I can go to find this out? I think I am overweight ARR.
Thanks for any help.
according to yahoo insider.
These individual insiders hold more than 50,000 shares each:
BELL MARC H...200,338
STATON DANIEL C...200,338
GUBA THOMAS K...125,188
BALODIMAS STATON MARIA...69,150
These legal entities hold more than 300,000 shares each:
STATON BELL BLANK CHECK LLC...438,300
POLAR SECURITIES INC...305,800
ZIMMER JEFFREY ...53,537
Understand once the FED raises the interest rates most, if not all, of these kinds of REITs will take a nose dive. I have several and know our days are numbered. We are good through this year but not 2012.
The Fed generally manages the short rates. As an unusual measure to prop the economy and avoid a double did down or worse (Depression), under QE2 it took the unusual action to buy long dated treasuries to also reduce the long rates.
Now, I assume you understand that the MREITs make most of their income by using their equity to borrow at the relatively low short rte (now being kept close to zero for an indefinite future by the Fed) to buy mortgages yield a much higher rate. Leveraging on the equity is running for the MREITs between about 8-9 times to increase profitability from the short to long (mortgages) rate spread.
When finally the Fed believes the economy is strong enough to begin worrying more over inflation than recession/depression, it will star raising the short rates--and that's when your logic fails. At that time the long rates will have move even higher over inflation concerns to actually initially increase the rate spread and profitability.
The risk for the MREITs is initially not so much from the short rate raising their borrowing costs as it is from the fact that the equity from their mortgage portfolio (their book equity) shrinks, and if it shrank quickly, they could be forced to sell out of their portfolio at a loss. Because of this risk, the market is requiring the high yield we see.
To moderate the risk of portfolio losses, the MREITs take several steps, to include, deleveraging, using derivatives that gain in value when the short rates go up, and using derivatives that gain in value when the mortgage rates go higher (compensating for their mortgage portfolios losing mark to market book value).
If you do not fully understand how the MREITs manage thru the interest rate cycles, you should not be investing or trading them.
Based on your post, you should stay away.
Best of luck
I understand your concern...The government has manipulated the numbers especially CPI. We are closer to 11.2% inflation, (Energy,food,medicine) and 19.7% unemployment (55-62 year old) having the most difficulty finding decent employment, not Wal-mart or McDonald's.
Others 17-34, are also finding jobs rough...So...QE III will come about and the Dollar will continue to fall. raising rates before Presidential election in Nov 2012 IS NOT AN OPTION. OBAMA will not permit or kiss his chances good-bye.
<Just an observation, but notice that all four classes of the Gabelli Utilities Fund pay VERY high proportions of their distributions in Return of Capital.>
Yes that is true, but please note that there GOOD "Return of Capital" and BAD "Return of Capital.
Examples of GOOD Return of Capital:
1. Unrealized Capital Gains
2. Option income strategies used by a lot of CEF ETFs
3. Master limited partnership passthrough income
A BAD Return of Capital is what ROC literally means: Investors are getting their own capital back. That is not good.
I believe what has occurred at GABUX in recent years is the GOOD "Return of Capital" in that a significant number of their holdings have risen sharply over the past year with the general stock market, which has allowed them to pass at least some of these gains off as ROC so investors obtain the tax benefit.
All things being equal, I would prefer ROC rather than ordinary income if it represents GOOD ROC because the tax advantages can be enormous depending on your tax bracket.
<Smooth, Just looking for your opinion..Do you think this is a good entry point for GABUX (6.58+/-), or do you think there's a significantly better point down the road.
Not looking for a lot of shares, just maybe 1500 -2000 is all, but for long term. Maybe add yearly. Seems so stable.>
I have to admit, I don't like you provide entry points or stock price advice on these boards, primarily because markets can be volatile and stock prices can vary depending on factors not related to the specific security. I will say that the high $6.50s and $6.60s are the highest GABUX has traded in a year.
GABUX long timers will tell you anything in the mid $6s and below is a great price for a stable fund with a 12+% yield. The stock traded in the $9s a few years ago, but has traded mostly in the $6s the past few years. This fund has paid 7cents per month since Nov 2000, prior to 9/11 & the financial crisis of 2008 - 2010. You can't get more stable than that. This is due to a portfolio comprised of some of the top names in the utility, energy & telecom space including NFG, CNX, SWX, VZ, CEG & EXC.
Some people wait until XD and buy on that day to get in 7cents lower. Here is their web site showing the most recent XD dates and other particulars:
The next 3 XDates are: 5/25, 6/28 and 7/27.
GL to you.