I just couldn't pass up commenting on such a generalization as "mREITs; the worst investment of all time". First of all, if one purchased the gold ETF, (GLD), when it was $177 in August 2011 and sold it this June at $119, that they did worse than having purchased NYMT in August 2011 at an average price of $7.00 and sold this June at an average price of $6.77 while collecting $2.20 in dividends. (One forgets that NYMT is higher today than it was 3 years ago in August 2010 and it has paid a significant dividend during that time).
I would suggest that there is more to consider in the recent price changes in mREITs. The first is that mREITs can be and have been very profitable and that it is not the nature of the business that is at fault. Second, virtually any well run business can adjust to a changing market environment and remain profitable if given enough time to make the necessary adjustments. Third, the recent rapid change in interest rates was faster and of a greater magnitude than anyone reasonable could have foreseen and a market "panic" resulted causing a rapid downward "adjustment" in share price. If the change had taken place over a 6 or 12 month period the share price adjustment would not have been nearly as great and in fact, the share price may have actually have increased as the effect of a steepening yield curve would have time to show up in the form of increasing net interest income. Forth, adjustments are now being made to the rapid change in interest rates and although these adjustments may take another few months to be fully implemented, it doesn't mean that the mREIT industry is broken but rather that adjustments are needed and I believe for the most part are being made and that the mREIT industry will continue to be profitable over the longer-term.
One final thought, in 2005 NYMT was selling for around $8.50 a share and paying a $2.10 Quarterly dividend.
On Aug. 12 2005 the 10 yr yield was 4.24 significantly higher than today
you have given yourself your own answer if you believe so - get short "the worst investment of all time" as you call it on ralies
was selling rallies here but will buy dips now and instead sell mfa rallies
better value here moving forward versus mfa
MReits HAD their time in the Sun and during that warm period you could've made some $$ But..,
Unless you bought protective PUTS, you gave away all your dividend PLUS some if you continued to hold.
NOT the worse investment but just an open window which is closing/closed FAST.
Looking over my losses with AGNC, ARR, and NYMT, I would have to agree. That's what happens when you chase yield without regard for principal preservation. Now it becomes a question of rather or not the price can keep up with future distributions and how many quarters to break even. Couple that with the great gold & silver take-down and it's been a pretty dismal year.
Im not trying to be a nickspinner.............. but dont any of you do any type of technical analysis?
I know I said earlier that the stock wasnt going to see $6.20 again, but the stock formed a rather sloppy head & shoulders & couldnt make the right shoulder, with low volume on the rise & falling chaiken...& all the fundamental indicators...