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iShares Mortgage Real Estate Capped Message Board

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  • solen.meek solen.meek Nov 14, 2012 2:30 AM Flag

    Anyone have a read on why this is cratering so much?

    If we go over the fiscal cliff and the bush tax cuts are not extended. Taxes will go up on dividends. But dividends from mREITs do not qualify as dividends but instead ordinary income. So this is not the reason for the sell off. I think the reason for the sell off is because REM is up 20% for the year +10% in dividends and people are probably trying to handle pre 2013 taxes in case we go over "the cliff"

    Currently it seems oversold to me. But the problem is REM has so much of its porfolio in NLY and AGNC that whenever something bad happens to either one of them they both drop an equal amount then REM gets hit almost as bad cause it has both.

    Sentiment: Hold

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