I've got, what was $20k, invested across AGNC, NLY, ARR. Down SUBSTANTIALLY. It's a lot of $ to me and I'm concerned. Honest sentiments only plz..I'm in a position I can hold for a year+ if need be. Interested to hear others opinions..
My experience has been that selling in fear is generally a mistake and following the herd is too. If you have invested for the income I would hold as in my opinion the Fiscal Cliff issue will be resolved prior to years end and that substantial dividend will bring buyers back. The time to have sold is past and in my opinion we are seeing a buying opportunity developing but that's not to say we have bottomed yet. GLTA
Hold. Don't fall into panic selling. But if you are so nervous with the recent price you will sleep better if you sell soon on a rebound.
Got to KISS (keep it simple). The market is saying all MREITs are overpriced, so get out of the way when you can.
my opinion for what its worth.
1. AGNC has already said they will buy back stock under bok value. right now its under book so thats a little support.
2. lets say they cut the dividend by 25% down to 3.75/share. so in one year you will make back 3.75 on any capital lost. in late jun/early july AGNC was trading for 33/share so after 1 year your back to the june levels.
IMHO a lot of bad news is priced into the stock. a 25% dividend cut would imply a yield of 12.7% still a good deal. My hunch is its a solid hold at these levels. I think a lot of selling pressure this month is fiscal cliff tax related. people are scared and want to protect profits and reduce potential taxes.
as warren buffet says,when others are fearful be greedy.
This is all about the fear of spreads coming in. The funny thing is if you watch the price of MBS (check out the website Mortgage News Daily or the etf MBB) it is showing that the price of the securities of holding firm. Even the weekly Freddie Mac survey is showing that mortgage rates have not been lowered dramatically since QE3. So is this all a headfake?
I am in the same position as you. Five years ago I managed a close relatative's trust fund. She needed income so I made substantial investments in REIT's. It worked for a while then interest rates started to go up and capital and dividends were substantially reduced. I am concerned that we might be seeing the same erosion and a year might not be enough particularly if we see a rise in interest rates. I am looking to depart from REIT's as gracefully as possible.