Everybody is doing this and or doing that and I'm not sure how they are doing, however I'm doing nothing and enjoying the dividends and a rise in the price over the last 2 years and I'm very happy with the results. My intent is to keep on keeping on as they say.
Sentiment: Strong Buy
Am long. Maybe never sell. The only mistake I've ever really made in this space is to trade. Buy, hold, stay long. When the curve steepens (and it will) the nervous nellies who are way smarter than you and I will pabic and hit bids. Just like last year. And I will be there with open arms. As rates move highe (and they will...someday) spreads will widen and this sector will become more attractive. Find the best names and stick with them. Unless GDP grows at 4%, over the next ten years REITs like AGNC will be very hard to beat. YOu saw NLY way outperform the entire market for many years as a buy and hold. Nothings changed. And by the way, the Fed is impotent as far as the front end. They can't move if for no other reason than the budget. The curve could get very very steep at some point as the world markets shun the dollar and shun our treasuries. Long MBS REITs and long TBT. TBT will bounce around, but that is a way better place to park excess cash than GLD.
I've owned about 2 years also, as well as ARR and CYS, to augment my social security and pension. I'm ahead of where I started in addition to collecting the nice dividends. The mReits should be good until the Fed decides to pull the punch bowl, whenever that might be. They say when inflation goes above 2.5% or when unemployment drops below 6.5%. My question is what happens if inflation takes off and heads above 2.5% and unemployment is still elevated way above 6.5%? I think we have awhile before we have to worry too much about mREITS tanking. Just my 2 cents.
Long and building positions.
For the long haul I recommend a balance of agency and non agency REITs. My core holdings include hybrid, agency and non-agency.
My intention is to never sell and continue building positions. I'll spread out to more REITs as the portfolio builds, but there is a big disadvantage in taxes (non qualified dividends). That said, it's still a fantastic way to build wealth over time, and their securities are generally pretty liquid compared to the book value of most companies.
Spreads widening - more spread income and less book value likely on the way for Q1 (April/May reporting cycle). Keep an eye on them for an edge.