I'm gonna wait until the FED actually begins to TAPER on their MBS purchases...That might turn out to be 'the worst of it', as mort. rates could pop higher...So, I may not pick the exact bottom, but I think it's safer to wait on the FED, to actually slow down / stop their MBS purchases...and see what the 'real world' looks like without the Wizard of OZ (but I have a feeling that they'll taper MBS last...could be awhile)
Yeah, I remember one analyst saying to "buy" SHO at $28...it did go to $31 maybe...but then the recession hit...Stock went down to $4...Then the same analyst said to "sell" !...After the sell signal, it reversed and went to $12....So, if you just did the opposite of what the 'expert analyst' said, you'd be RICH !! (when they say 'buy', sell it...when they say 'sell', 'buy' it...of course, I'm big on "macros" , so there are many other variables to look at...i.e. even good stocks get hit in a bad economy, and vice versa)....i.e. yeah, I'll listen to others, read things, etc...I have just a handful of people I'll follow , based on their track records, etc, but even they get it wrong occasionally. Probably the only thing I really learned was to go with my own feelings and studies and then make the bet...Generally, my bets would come when people were MOST NEGATIVE and the stock had caused a lot of PAIN (reminds me - I used to refer to myself as a "pain investor"...Of course, I hate to see pain in others...but it was just a signal. And in the past, the action in this stock would have drawn me like a moth to a flame, except that it's not exactly the type of stock I'd be looking for...maybe because I , too, am not a genius on mreits...But it's always fun to learn new things.
(ps...hmmm...Goldman did just issue a nice, timely 'sell' on AGNC....good timing...hahaha...they really like to help others !....soooo? Oh, but like I say, just wait for the actual MBS tapering to begin - then check it out...don't try to pick bottoms.)
Oh, I suppose everyone posting replies contains some 'truths'. And investing is a lot about timing, etc...I saw a study of the 'great stock pickers, prognosticators, etc'...Cramer was correct 47% of the time...And of course, given the 4-5 year run-up in stocks we've had, pretty much everyone is now a 'genius'...If it goes to their head, it can be dangerous in the future. Anytime I ever got to feeling happy about my 'picks' (how great I was doing), I always got knocked down later - so, any time I'm having good days / weeks / months, I have to knock myself down, mentally, and remind myself that things can change. ( "ego kills" is my motto). I'd probably say many who've been in this sector were ones who wanted / needed some high yields on their money (many seniors? probably...) And I have said that many are not sophisticated enough..that's not a 'put down'...it's just that many people don't have the time to study macroeconomics, micro, valuations, competition, cycles, etc....so they do have to rely on others, like a Cramer....But over time, they can become better, perhaps...Me? I've always been primarily a value/contrarian investor , and like "hearxhere", I had my best times after the 2002 and 2008 recessions....I love times like that...(like sex...hahaha). But right now, I'm definitely lagging the markets after having put a lot into "preferreds" to PARK MONEY. In times like these, I just have no bearings...not a momentum investor...My last decent picks were WAG / RAD / SWY...over a yr ago...but I see FEW if any gems now...so, I 'park', and let the markets 'beat me' while I wait...could be a very long wait with Yellen coming...prints? Anywayyyy, my only advice in here is the same - wait until they actually begin to taper their MBS purchases...But I have no positions yet. I'm just sitting (and slowly bleeding) in some preferreds...as rates rise a bit...divys cover the losses....tread water...But this econ. landscape is not my investing 'cup of tea'.
I'm holding off until the MBS taper actually begins...that should push mort rates a bit higher, and you might see the 'price bottom' on some like NLY / AGNC...I also feel that the 10 yr will rise a bit more, heading into the taper, but once it actually begins, we may actually see a bit of a pullback on rates, from wherever it is (i.e. markets tend to discount early, then correct back....We had the same effects, only in reverse, in QE 1,2,3 and 10 yr rates)...Bottom line: I'd not buy (more) until the MBS taper actually begins...then I'll consider it...good luck !
Actually, Mitch, I have a bit of pitty in my heart for you...and maybe...just maybe, you've not been given both sides...Here's a good teaching moment...some of my liberal friends say it's not Detroit's fault that they fell on hard times...the car industry pretty much failed there...so, not their fault. But I have to say that the car industry in Texas, Tennessee, Alabama and the Carolinas is doing very well. So, you should ask 'why'? Why couldn't the car industry thrive in Michigan? Unions...and that it's a non-right-to-work State...So, I have to say, who created the pain there...really? And let's be clear, our President (Acorn activist) is a lover of unions...why? Votes....Oh, he may actually care about getting better wages for people...but his actions have the OPPOSITE effect...He just doesn't seem to understand how economics works....and that is sad, if that's his goal....Instead, he just tells people to go out and picket for more wages, go on strike, etc ...and the businesses disappear, creating those poor hungry people you worry about....But I tell you (not sarcastically...but as one who also cares about people), who is actually making people poor and hungry? Find me someone who understands how businesses really work...how they can create even more jobs, and that'll be the guy I want as President...I think Romney understood how business works...Sure, not everyone wins....some businesses are closed if they cannot compete...always gonna be some pain...But fighting the private sector is not the way to go...take a look at the difference in right-to-work states growth vs. union states...The right-to-work states have done so much better....I heard that Texas has created 1/3 of the new jobs since the recession ended....one state ! But somehow, Obama can't stomach that...his philosophy is so tied to unions, etc that for some reason, he cannot even consider why some things work while others have not...It's plain to see...He'll not change tho, imo...sadly
to continue: Like Margaret Thatcher used to say..."Socialism works well, until the other people's money runs out"....People have choices....if they feel one place sucks, aka CA, they can move...CA is always so concerned about helping 'the poor', they just forgot that their actions drive away jobs, etc...So, they raise even more taxes, thinking that'll solve the problem...which is doesn't...Just pushes more businesses away...i.e. politicians are panderers and short term thinkers...it's the next election they wanna 'buy'...and to heck with what happens 10-20-30 years later, when the bill comes due, ala Detroit, Stockton, Vallego, San Bernadino...and a few other BK cities here...the games eventually end....left without jobs or hope.
to continue...they now sent that work from CA to NEVADA, and have a CA certified tech sign off on the work...and send the results back to CA...So, CA destroys jobs....and the 'poor, unemployed' get hungry....In Nevada, they created jobs...and eat well !...we need job creation...and unions and non-right-to-work states just don't 'get it'...they're more concerned about getting votes for politicians in return for handouts...until the money runs out, ala DETROIT...whaich hasn't had a Republican mayor since 1957...So, now if they starve, who's fault is it?...who put them in their position of being destitute?...Like THATCHER
more melodramatics...come onnn...What the 'poor' need are JOBS...You know that Toyota has only closed one plant in their history...and that was at a union plant in Fremont Ca...poof...jobs gone...Then, Toyota built a huge state-of-the-art facility in San Antonio...voila...jobs created in a right -to-work state. Same thing happened to my 2 laboratories in CA...They got over-regulated and over fined...so they closed em' down and moved the work to Nevada...Now they sent the samples from CA
It really all boils down to economic theory, doesn't it...i.e. the 'fighting' in here. There are those who feel it's the govt's job to bail everyone out, help everyone from cradle-to-grave, without understanding the moral hazard of making people weaker and even more dependent, until they begin to look to govt to solve all their problems (become brain dead and lazy)...That would be the Keynesian crowd...the neo-progressives, who mean well, but do not understand the long term 'human' consequences of their actions....vs. me, an "Austrian"...And the gulf between those 2 philosophies is wider than the Grand Canyon...NO WAY you'll ever see any 'coming together'...and that's the struggle / deadlock in D.C....Never the twain shall meet...(but I do say that if you don't like the way the country in general is headed, the next best choice is to find a State that shares some of your values....For me, it'll likely be Texas, I suppose...lower taxes, less services...cheapie...you won't get a lot of handouts there, so you won't attract the Keynesians...hahaha....They can go to Chicago, Detroit...or other Blue Cities...and get their handouts,& no jobs vs 'right to work' states that allow you an opportunity to work, gain some respect...and be proud...Man, am I gonna get bashed now, or what, Raybans?
What's this guy's prob? got up on the wrong side of the bed, maybe (if he's long AGNC, then maybe that's why...can't blame him...but I have no idea what his position is)...I'll somewhat agree with him that seniors have fared a bit better perhaps, in some ways...but the low interest rates have hurt them too...mixed bag. Nothing to get all upset over, tho...Perhaps it's the Obama stuff - now me personally, think the guy is probably the worst Prez I ever saw...and certainly knows little about economics, imo...He has 'an agenda' and blinders on....Funny thing tho, the rich have gotten richer...and the poor have not fared well, except via handouts. Certainly the gap has widened between rich and poor...so, with all his attempts to help the poor climb out of poverty, he's not done too well (we'll blame the Repubs, right?...ahahaha...whatever).
But after such a bad recession, it would have been expected that some 'rebound' would occur...As for govt having to print money to raise asset prices, well, that isn't their function, is it? (although that seems to be the tool of choice (printing)...easier than making tough, long lasting changes that are needed.) personally, I'm just one who believes that a very limited govt is the best...and 2 Nobel winning economists have wrote about this (countries that have the least govt and the lowest taxes...have done better, historically)...I'm not for govt being in the healthcare biz at all...but that's an extreme view, I'm sure...but pre-1963 was decent, without Medicare...Oh, I could go on about education, housing, mail , trains, etc etc...blowing dough and making costs rise wherever govt's wallet is open...they did so well with SOLYNDRA...and about 16 others that went BK...money down the tubes....But I'm a Libertarian, so I'm not gonna be loved by almost anyone in here...I just want govt to pretty much leave me alone...stop reading my emails....stop trying to be involved in other country's probs...stop giving money away to our enemies
I'm just one guy...part of the 79 million baby boomer generation - and I imagine that many of them are going to NEED yield...CASH FLOW, to supplement their retirement. I've sorta been waiting for that MASS of people to show up, and start buying preferred reit stocks (where I happen to be 'parked')....but for now, it is what it is...I never try to mentally 'push' it...waste of time.
For now, maybe they like 'riding the market wave of appreciation'...and who knows, maybe the WEIMAR FED can pump up all the indexes for years, ala Germany's 8900% gain, in 1921-23 end....Sort of a dangerous game tho....But it is something I wonder about...i.e. just how many people like me are out there, getting close to retirement, and not desiring to play in "the market casino" forever...and try to find 'fixed income' investments, like muni bonds, or junk bonds, common stocks with some 4%+ yields, tobaccos, preferreds, reits, mreits, etc etc....I mean, it's almost a matter of NECESSITY for some, to invest for cash flows, cause' it may be difficult to hope common stocks rise and you 'sell of chunks' for living, as needed...Oh, just wondering, I suppose - will be interesting to see how this group of 79 million changes the investment landscape, over the coming years...and where they'll choose to invest ( maybe we'll just all die and our kids will play in the 'market casino'...and it'll never end?)
PS...NO, I do not wish to anger the longs in here...or scare anyone...I don't make any money doing that...WIIFM
But I do like trying to give people a better entry point...but it's anyone's guess perhaps. But I do think it best to actually wait until MBS taper begins (of course, maybe it won't...and maybe the m. rates can have the lid kept on m. rates?...who knows...but if the economy does improve and if inflation ever breaks out, then rates should rise everywhere...and yes, my preferreds will "bleed"...I'll just keep adding to them over time...cost avg...get better yields on new money...and maybe that'll work for me....But not a strategy for the young, perhaps? (maybe we'll go back to the 1979, when the 10-yr hit 16%...smile)
...to hold off from buying these shares (or from adding to the position), until AT LEAST the MBS taper (part) begins, and see where rates go....i.e. just stand aside and watch the (COMEDY) FED show.
I wound up buying a tad more RSO-B preferred, on the dip today....paying about 9.2% fixed payout...goes x at end-month (selling at a 2% price discount to the A shares...a lil' anomaly...passes the time)....I will not be surprised to see it drop below $22 after they go x...but then I get more later...That's just the way I'm dealing with it...just a strategy solely focused on 'cash flows', without regard to balance/pricing. Others have the same strategy in here, but it's just my preference to have a FIXED PAYOUT in preferreds (but yes, if times ever do get better for merit common stock, then they can raise divys, unlike my preferreds...but I think that's a ways off. To each his / her own....TEXAS !!!
ps...and yes, I expect my preferreds to go lower (bleed) as the taper comes more into play...I just accept it ...and jack in more divys...for more future cash flows, for when I'll need the extra dough.(like a BOND, basically)...
Yeah, I know you meant to say...'will have justification for tapering' (as you corrected below)...But don't be at all surprised if Yellen falls back on the low inflation data ( I PERSONALLY THINK THAT'S THEIR MAIN WORRY...Ponzi can't work without inflation).... and the 'employment ratio'... as 2 reasons for her to stay the course on not tapering. I wish they would get out of this taper stuff, but my guess is that if she does taper, it'll be a VERY SMALL increment, with the talking points being that 'she retains the right to boost it back up, any time she feels necessary' (this story gets old...Always an excuse to PRINT)...I'd also guess that they'll possibly taper on the bond side, but do little if anything on the MBS side, perhaps, as they want to make sure the housing 'driver' of the economy stays in place. But yeah, I'm all for getting completely out of this taper stuff, acting as a crutch for D.C....And if D.C. can't function, fine...gimmie a lil' recession...and shake things up a bit....a return to reality,... but I do get the idea all the CB's like to print, print, print....keep everyone happy, even if it is artificial....whatever...'will be what it'll be'. (I calculated my cash flows from divys is around $28k now, per year...supplements my other 2 teenie pensions...I'll not be rich but I should be able to survive in Texas, when I go...as long as they don't run out of water...But I guess I can just drink bottled tea or Lone Star beer...to wash down my BBQ.
I once read an article, comparing low dividend (yield) stocks, medium yielding...and high yielding...Was interesting to find that the medium yielding stocks performed better than the other 2. But nothing is ever that easy - but in a way, that's why I opted for "preferreds", with their lower yield than common stock mreits, but at least they had a FIXEDrate payout...so, I'm lost less (hahaha)...But my strategy is purely on nominal cash flows, without any major regard for my 'balance'...Pretty much like a bond investment, actually, where bond prices have dropped lately, and rates rose a bit, and payouts remain fixed...but for someone like me, I just won't be selling my preferred holdings...I only want that nominal cash flow (luckily, I still have a few years before I actually have to use the dividends as a supplement to my retirement, so I'm still able to reinvest the divys every quarter, and increase the cash flows every quarter, even tho the stocks themselves have bled, and I'd assume my preferreds will bleed more, as rates rise - but I'm just gonna ignore it, and just plow the divys into more. I guess it's an old man's strategy...not for everyone perhaps. (NRF-C /NRF-D / RSO-B ...all over 9% yield, fixed)
I'd wait for Yellen to stop buying MBS paper first....that will likely be the worst of it, if mortgage rates rise a bit (then there's Mel Watt...but minor compared to that MBS tinkering)...Thing is tho, I wonder if they'll ever taper their MBS purchases? Bonds, yeah...but MBS? Could be a ways away - I'd hold off buying these mreits until the FED gets out of the market!...just watch for now, imo...good luck tho !!
now that might actually be accurate...I mean, I have a fish tank, and I'd favor any one of my fishies over that IDIOT Obama !! THEY DON'T LIE.....THEY DON'T MAKE FALSE PROMISES...they just swim and do NOTHING, which is BETTER !!
"....and the rich get rich and the poor get poorer...in the meantime...in between time...ain't we got fun" ( I think that's a 1928 song?....Things always change...cycles, don't they...like some Shakesperian play)
one thing to note: some look at the 13.5% yield and think they just subtract the 0.5% mgmt. fee, giving them a 13% return...Well, not really. That 0.5% mgmt. fee is based upon the total $ amt invested....so, if you take the 0.5% x $ amt invested...and then subtract from a year's worth of dividends, you'll find that the 13.5% is more like 9% or so, when I did the math many months ago...Yes, I also was drawn to the diversification aspect, but when I saw that the true yield, net of the fees, was not all that great, I just decided on the NRF-C/D paying the same 9.1% or so - i.e. I'll be damned if I'm gonna send Blackrock's kids to Hawaii, on mgmt. fees...I'll send my own kids !!