sam
Lieutenant
Posts: 123
|
Post by sam on Sept 18, 2022 0:37:26 GMT
Mortgage REITs such as NLY or AGNC were popular back from 2010 to 2018 due to their higher dividend yield but their share price kept on declining. One argument was they have to reinvest into lower yielding mortgages dues to refinancing but for most part declining interest rate should increase Par Value of portfolio Bonds which for some reason did NOT result in higher NAV or share price of these mortgage REITs.
Now in YTD mortgage interest rates are rising but their share price is still declinging.
How do they make money it seems like their share price is keep on declining regardless interest rate direction.
|
|
|
Post by ECE Prof on Sept 18, 2022 0:49:52 GMT
NLY or AGNC
I used to invest in both. AGNC was my favorite for a long time. I cashed out last year and moved. I recall that it uses Government-backed mortgage securities. But, under the present circumstances, I would not touch those until the FED finishes its job. God only knows when it would be over?
|
|
sam
Lieutenant
Posts: 123
|
Post by sam on Sept 18, 2022 1:05:12 GMT
That is my point in rising interest their portfolio value goes down and so will their stock price.
BUT they did lose money when interest rates were going down. So not sure what to make of it?
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 18, 2022 16:05:00 GMT
|
|
|
Post by FD1000 on Sept 18, 2022 22:58:57 GMT
Mortgage REITs such as NLY or AGNC were popular back from 2010 to 2018 due to their higher dividend yield but their share price kept on declining. One argument was they have to reinvest into lower yielding mortgages dues to refinancing but for most part declining interest rate should increase Par Value of portfolio Bonds which for some reason did NOT result in higher NAV or share price of these mortgage REITs.
Now in YTD mortgage interest rates are rising but their share price is still declinging.
How do they make money it seems like their share price is keep on declining regardless interest rate direction.
Good post, you just found out why total returns count the most, regardless how high is the income/yield.
|
|