Published Wed, 13 Mar 2019 07:00:00 -0400 on Seeking Alpha
The T-Rex of mortgage REITs, Annaly Capital Management (NLY), currently has their 4 preferred shares within our hold range.
Annaly’s preferred shares carry our lowest risk rating of “1” on a scale of 1-5.
Source: The REIT Forum
We’ve found preferred shares provide an excellent opportunity for investors to get a high yield with lower volatility. We cover preferred shares frequently and today’s picks come our latest article for subscribers: Preferred Shares Week 141.
We believe preferred shares limit risk
We agree wholeheartedly with limiting risk. We prefer to overweight shares with lower risk ratings and we assign the risk ratings ourselves. There aren't many credit rating agencies covering these REITs, but we've covered the common shares and built up the knowledge necessary to evaluate the risk levels. We also benefit enormously from running a subscription research service covering preferred shares. One individual retiree would never have the time to do this manner of research for themselves. One more-than-full-time analyst plus an apprentice shouldn't have much difficulty doing it.
We cover about 50 or so preferred shares for subscribers on The REIT Forum, but rarely have positions in more than 15 at a time. We usually have our top choices heavily overweight as well.
Many of our subscribers are B&H investors. They use our research to screen for low-risk shares and then to watch for buy alerts so they... Read more