## How I Play AGNC To Get 40% Return

I got into AGNC in early Sep. last year when I did a refinance of my home. I was forced to take out $100,000 more money in order to lower my rate from 3.75% down to 3.15%. So I did some research trying to find a place where I could park those extra money yet getting better return than that 3.15%. At the time I had EAD in my portfolio, which pays about 10% annually return, so I originally planed to dump all those $100,000 into EAD, thinking that I would pocket 6.85% extra after paying 3.15% mortgage interest. Then luckily I found AGNC, which had been consistently paying $1.40/sh qtrly divvy, or about 20% yearly return for more than a year . After several days worth of DD, I determined that since Fed will keep the short term rate at close to 0% for at least another year, the spread that AGNC uses to make money will be stable for the same period, thus to pretty much guarantee that $1.40 dyvvy is gonna be safe for the timebeing, so I decided to open a margin account and put all this $100K in, and bought $3650shs at about $29 (very close to ED at the time, thus a fairly high price). Then, together with the XD came the secondary offer, which lowered AGNC down to $26 from over $28.50. It was a shocker to me at the time, but I ended up margin it out and bought 3000sh more. To my surprise, less than 3 weeks later, AGNC had gone all the way back up to pre-secondary level, and I happily sold out the 3000sh margined shares, pocketed $6,0000, which was more than the $1.40/sh of 3650 would give me. After that, we all had gone through another secondary in Dec., which took AGNC down from $29.60 to $28. This time I doubled down my shares again with the full margin capability. It was really a pleasant shocker to me to see AGNC fully recovered secondary share loss in just 3 days this time! I happily sold off my margin shares with about $1.50/sh profit.

So, based on the above simple fact, we get $1.40/sh divvy almost for granted each qtr, and we get one secondary almost for granted in each qtr as well. If you do the same as I do, you will get 2 chances each qtr to earn $1.40/sh, thus doubling your return to roughly 40% in a year. Not too shabby, huh? And, it’s not that complicated to do either. All you need to do, is to long AGNC at all time, and double down your shares whenever they do a secondary. You don’t have to buy/sell options, timing and guessing the trades around earning release or x-d, etc. yet you make 40% return almost for granted! Simple as that, right?

GLTA.