I made some money on a financial reit & got out while the gettin's good (whew!). Think I might use the proceeds to buy some more D, but don't you guys get in ahead of me & drive the price up.
I'm still staying away from the common on the premise that RMR will utilize any upside to their own advantage at the expense of common shareholders (remember GOV? Where did all the dollars go, long time passing.) Though I still think they will take smart action to prevent much if any downside.
Is bairdgs still around?
My only issue with Fidelity was that they didn't let me put a sell stop under a REIT common (AGNC). That is a very strange policy. However, when I spoke with the Customer Services Rep., he showed me how to work around this with a contigent order that does the same thing.
I have actually had outstanding service from Fidelity over many years.
I would agree that Fidelity is a little cumbersome. Though I have not had the problems mentioned, I have recieved many differing views when asking about MUNI's. Some of their features are nice, while others are not. That is why I have 2 different firms with my holdings. I use the firm that meets my needs best for the type of trading I want to do.
One never will fit all you want, so don't fight it. Find another that will do what you need the way you want to do it.
Fidelity drives me nuts. I've transferred all of one account and 60% of another to two other brokerages. Fidelity is the brokerage with speed bumps. I can't tell you how many times Fidelity has slowed me down through extra steps or regulations (or arguing with me over investment grade bonds!!! when I called to check on a technical detail). We've lost money a number of times when I had a good idea and Fidelity held up things so I had to wait a day or over a weekend to trade. Our other brokerages are facilitating angels by comparison. As soon as I research a 3rd brokerage (for diversity--we're paranoid,) au revoir Fidelity.
Sorry, I meant Roth 401(k).
(Yes the typo makes my whole post look un-credible......)
What both have in common is that possibilities are being limited for investors. As a do-it-yourselfer, I want to be able to do as MANY things as possible. And if that includes putting after-tax money into my 401(k) instead of before-tax money, or adding a sell stop to a REIT, I want to be able to do that.
That is really idiotic of Fidelity.
They also don't support Roth IRA's, because "we haven't updated our computer system to support that kind of account." Instead the guy recommended their Solo 401(k)!
I thanked him, walked out and they lost my business - I had been interested in converting.
I don't know who is running their technology department but their practice of limiting avenues for investors has got to be shooting themselves in the foot. Self-directed investment accounts are looking for flexibility.
*end soap box rant*
I am still around. I believe the CWH D preferred is a great risk/reward purchase. You will not see much capital appreciation but it's a good yield in today's world. I will say, contrary to your concern about financial REITs, that I just bought some AGNC with a yield of 19%. I put a 10%sell stop under it to protect myself.
I don't think the yield curve is going to steepen much this year. AGNC only owns the Freddie and Fannie MBSs.
Thanks for the tip, Stephen, & good to hear from you. I was in a little riskier company for a few months, RAS, but only in the preferred where I collected one dividend & bailed when it went over $20. Certainly Freddy & Fannie will be muddling through no matter how much money the taxpayers have to put in. Accordingly, companies in mbs guaranteed by the two F's ought to be "safer".
How about the interest rate spread, though, where I thought the Mreits made their money? I hadn't thought the short term rate would move much very soon, but with real time inflation (excluding housing, which is another subject entirely in today's climate) seeming to accelerate, isn't the main risk in missing the timing and seeing the spread compress? When it starts to go it might happen pretty quickly, as I see the FED being primarily reactionary and often too late as opposed to preventive.
My other worry with the Mreits is that they are still in varying degrees up to their armpits in derivitives, and are continuing to write more. I still have a very murky idea about where the money comes from & who gets it in that environment. Of course, the legal side of things is starting to wonder that as well, as foreclosures keep evolving.
All the best, Arf
They are making a bunch of money from GOV,the cash from the spinoff bought them equal or better properties and they have about 100m in profit sitting on the books.
They get over 16m per year in divs while waiting to dump the shares at a 100m++++ gain.
Now is the time to be buying the common. In a rising rate environment the preferred will suffer just like bonds. The common yields more and the yield is secure, and you get protection against the sinking dollar and the coming inflation. Look at the recent action of the common compared to the preferred. No brainer.