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American Capital Agency Corp. Message Board

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  • bully4u2 bully4u2 Dec 12, 2012 5:36 PM Flag

    Bernanke and the Fed

    You say you are 39 years old. Quite candidly, you still have a lot to learn. Take it from someone who is 30 years older than you are.

    FYI, REITS are not the only investment I own. I own BDCs, leveraged bond funds, stocks, etc., and I own, and have owned, a significant number of individual bonds. Have you taken a look at the interest yields of investment rated corporate bonds of late? Best I can say is that it stinks. How about non-investment grade (junk) bonds. Considering the risk, those yields for the companies that likely will have the funds needed to make the payoffs at maturity are around 6%. The bonds I hold were purchased in 2009 through 2011. They are non-investment grade and were purchased at yields between 10 to 12%. Today, those same bonds yield half those amounts.

    I am doing OK in this turbulent market - generating more income than I need to live on. However, many retired folks are not, as they have had their funds in savings accounts, CDs, money market accounts, etc. These are the people that never actively managed their portfolios while working. Now, they do not know how, nor what to do as they watch their money market accounts paying a rate of .01%. The CDs that used to pay them around 7 or 8% only a few years ago, are now paying 2%.

    My friend, you will not be retiring for near 30 years, if ever. I likely will be dead in 10 years or less, and I do not have children to worry about. You will be the one having to survive in an economically devastated USA - you and your children and grandchildren. Good luck.

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    • Sorry I didn t mean to teach you, just to give a piece of advice. I know and I read about many retirees complaining they are broke because AGNC or other REITs are plunging: well, at 60+ I would never put my savings (most of them) in stocks. I have worked in my own business (jewelry) for just 7 years and "retired" at 32. Too early I regret it. Now I am just trying to administrate my money by trading (so I am not fully retired, I am just working free time in day trading). For my real retirement I don 't rely on stocks, but I bought 4 small establishments in shopping malls and rent them. I make between 7.5% and 11.5% CLEAN a year in return (clean means already deducting taxes, fees, anything). So, my point was: why should I fear and lose my sleep with MREITs which gives 15% (or less) dividend minus taxes when I can make much easier money by renting those shops ?
      Stock market, mostly stocks are not for retirement. Sorry I didn't mean to be disrespectful, I have surely lots to learn, but I am also aware there are guys 10 years younger than me (28-29 y/o) who are monsters in stock market and they surely can teach both of us lots of stuff.
      Good luck my friend.

 
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