This was my answer to Dan's question from another board.
Hey Dan - These are 2 stocks (NLY & CIM) to consider parking some cash while the Fed keeps interest rates LOW. You get a good ROI in the form of divvys - but don't expect much in growth. You'll need to be prepared to exit either of them, IF/WHEN the Fed starts to raise interest rates. OR..... more importantly, when you need the cash to do some "bottom fishing" later this year.
Both companies have a very simple business model. They both borrow money at extraordinarily low rates (average cost of funds was 2% this quarter) and then use that money to purchase securities that typically yield 4%-5%. The spread on the interest income is where they make all their cash. They are REITs - 1)Annaly Capital Management (NLY) - Current annual yield is 16.6% 2)Chimera Investment Corporation (CIM) - Current annual yield is 17.6%
Take a look at these and see IF you feel comfortable with either of them in your portfolio.