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Post# of 47066
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Toofuzzy

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Toofuzzy

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Re: SFSecurity post# 38383

Saturday, 10/11/2014 9:14:56 AM

Saturday, October 11, 2014 9:14:56 AM

Post# of 47066
Allen

Mortgage reits are a nasty security. First their income will be cut as they buy new mortages because the spread will be less as short rates climb faster than long rates. Also the value of the current mortages at 4% will be reduced to a lot less when rates go to 8% and no one refinances.

So not only are there asset values cut in half but their income can go to like zero because of the leverage they use going against them because they borrow short and lend long.

There are dragons out there.

So you are talking about investing in a leveraged product on a leveraged product.

Just go to the race track and get it over quickly.

Toofuzzy

Take the road less traveled. It will make all the difference.

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