Thank you from a terrible investor who's function in life is to try to break even from a stock the rest of my life; starting 3 seconds from the time I buy it.
You sound like maybe you don't know how to properly define what your goal is. By break even you might mean capital preservation. You might mean, just keep a pile of cash on hand, but then you lose to inflationary environments. You might mean a hard industrial asset like gold but the 'value' of gold is volatile.
In my opinion, at these prices ARR is relatively appealing. Theoretically something like ARR is designed to stay at the same share price and simply pass nearly all of its earnings to owners. But, you get situations like we have today where long term interest rates cause the face value of bonds to move around, and since ARR book value is based on the bonds they buy, you get:
Long term interest rates lead to bond price changes. Bond price changes lead to ARR book value changes. Book value changes impact your stated desire to break even.
You need to clarify.
No one knows what is going to happen with any of these stocks. But, the problem is the media lies and govt. manipulation... we have way more to worry about in the overall stock market. The govt, fed and media have convinced people that up is down and down is up so you can not believe the information you hear and without truthful information you can not make a good decision. The entire stock market is over bought and there is no reason for it to be this high. It has to come down... I would worry about a falling knife. As for ARR when a stock gets this low it is easily manipulated by forces beyond the small investor control. But, it is times like these when a person can make a lot of money with very little. If you are following financials this company is doing quite well. If you are tracking the dividend it is down from 10 cents months ago. See with rising interest rates people are most likely headed to less risk with better yield, but this is no junk fund there is valid reason to hold this stock. I believe as the market fall to about where it belongs the DOW around 9000 and the Nasdaq around 1700 I believe you will see people swarm back in and push it back to $7. The entire rally was built on lies and it has become a Ponzi scheme and it has to fall.
Never buy a full position at one time. If you want 1000 shares, start with 300-400. If price goes down, re-evaluate if story is intact and buy 300 more if you still like it, and so on. Also consider selling cash-covered puts to initiate a position. If stock is at $10, sell the $9 put, This ensures a lower entry point. In all cases, if the stock takes off, at lest you make some money.
Good advice here. I don't sell puts to initiate a position as I'm trading in retirement accounts. I do however like to scale into a position. I first bought this stock at $5.30 8 days ago and have bought more at 15 cent increments on the way down so at $5.15, $5 and again at $4.85. I have bought twice at $4.85, most recently today, and my cost basis is now slightly under $5 as I have purchased more at each subsequent lower level. It looks to me like it has bottomed at the $4.85 level. If I'm wrong, I'll be buying more at $4.70 and so on until I'm fully into the position. It's important to not get into a position too big too early and it can be scary when it keeps going down and you are fully extended with no more cash. You need to maintain enough cash that you can really take advantage if the trend continues. I've made very good money with this method and typically I'll be out of the stock within a few weeks of first buying the name. When the bounce comes it will come quickly and often without warning and it will last a few days. In the case of ARR it may be triggered by an announcement that the dividend will remain unchanged or simply a piece of news about how oversold the sector is and that the Fed "tapering" is still a way off. Technically, ARR is very oversold and I don't think it'll stay at this level much longer. I would not want to be short.
Sentiment: Strong Buy
I rarely, if ever post on these boards although I do read them regularly. But your question seems honest, so I'll reply with my take on things. If you aren't an experienced investor, I would avoid this stock right now. The stock's value has declined significantly over the last six months in an ever-increasing rate. This is probably caused by a combination of three things: regular cuts in the dividend, the issuance of more shares, and questions raised by the fed's potential pullback on mortgage bond purchases. The stock may recover and even come out ahead, but I wouldn't put money here right now with these large question marks present.
Hope this helps.