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November 13, 2012 at 10:41 AM #754612November 13, 2012 at 10:46 AM #754613
Diego Mamani
ParticipantToday AGNC is down 4%, but volume is quite high. Every time the price drops, volume increases. It seems that there are people out there ready to scoop it up every time it gets cheaper. Whether today’s buyers are astute or not, only time will tell.
Also, keep in mind that shares like CEL and AGNC are by nature very volatile, esp. the latter’s price fluctuates wildly with every piece of news. The market is currently digesting what Obama’s win means for the mREIT sector.
November 13, 2012 at 10:47 AM #754614Participantdup
November 13, 2012 at 10:47 AM #754615Participantdup
November 13, 2012 at 10:50 AM #754616an
ParticipantI actually got out of CEL awhile back as a rebalancing strategy. Locking in my 40+% gain and invest in some other stuff. Still have AGNC though. AGNC is my long term RE play. We’ll see how that turns out.
November 13, 2012 at 12:57 PM #754621no_such_reality
Participant[quote=Diego Mamani]
Also, keep in mind that shares like CEL and AGNC are by nature very volatile, esp. the latter’s price fluctuates wildly with every piece of news. The market is currently digesting what Obama’s win means for the mREIT sector.[/quote]So how do I check the campaign information to verify how the company insiders contributed their money?
November 13, 2012 at 1:01 PM #754622
CoronitaParticipant[quote=no_such_reality][quote=Diego Mamani]
Also, keep in mind that shares like CEL and AGNC are by nature very volatile, esp. the latter’s price fluctuates wildly with every piece of news. The market is currently digesting what Obama’s win means for the mREIT sector.[/quote]So how do I check the campaign information to verify how the company insiders contributed their money?[/quote]
none of your business. But don’t worry. You’ll be able to figure it out. They are the ones that will start laying off people…
November 13, 2012 at 1:44 PM #754626livinincali
Participant[quote=AN]desmond, I agree. timing is everything. It’s different if you buy it last year vs if you buy it this year. This is also a small fraction of my total portfolio. You have to do your own research. There’s no safe bet in the market.
flu, I didn’t buy AGNC solely for its dividend. I was looking to invest in REIT and AGNC looks the best to me at the time with the combination of appreciation and dividend. Because they’re a REIT, they have to return 9x% back as dividend. So, I’m expecting RE to recover, so AGNC seems like a good idea. But like I said, it’s still a small portion of my total portfolio.[/quote]
AGNC is a high leverage play. If they are right about their investments it should have a decent return, if they’re wrong it’s a zero. It’s at least a 10 to 1 leverage play. They have 51 billion in liabilities, 54 billion in assets and 2 billion in cash. If the value of their assets drops by 10% they are bankrupt.
They also don’t have a long term history of big dividends either. Cash flow in 2009 was 118 million, 2010 was 288 million and 2011 was 770 million. So just 3 years ago the dividend was 1/7th of today’s and their return of investment is around 1%. 770 million cash flow on assets of 54 billion.
November 13, 2012 at 2:09 PM #754628Participant[quote=livinincali]AGNC is a high leverage play. If they are right about their investments it should have a decent return, if they’re wrong it’s a zero. It’s at least a 10 to 1 leverage play. They have 51 billion in liabilities, 54 billion in assets and 2 billion in cash. If the value of their assets drops by 10% they are bankrupt.
They also don’t have a long term history of big dividends either. Cash flow in 2009 was 118 million, 2010 was 288 million and 2011 was 770 million. So just 3 years ago the dividend was 1/7th of today’s and their return of investment is around 1%. 770 million cash flow on assets of 54 billion.[/quote]
I agree. Like I said, it’s my RE play first and foremost. Dividend is second. It’s a way to have “rentals” without having to buy physical rental.November 13, 2012 at 3:39 PM #754633CoronitaParticipantSpeak of the devil…
Bold items are kinda of the issues.
Ummmm..It’s a no brainer……Sell….Dividend play is over…It’s done….
Reaction or over-reaction…People don’t want to take a chance in 2013.They are gonna try to cash out and get this year’s tax rates..
http://finance.yahoo.com/news/why-investors-dumping-dividend-stocks-175502252.html
Why Investors Are Dumping Dividend Stocks
The fear of higher taxes has put a chill on dividend-paying stocks, in what some analysts say could be an overreaction to the “fiscal cliff.”
The Bush-era tax cuts on dividends and capital gains, to 15 percent, are in the cross hairs, as congressional leaders and President Barack Obama this week start work on reshaping the tax and spending components of the so-called fiscal cliff.
The cliff is the $607 billion expiration of a bundle of tax cuts and other programs, and the onset of automatic spending cuts that take place starting Jan. 1 if Congress does not act.
For dividend investors, a worst-case scenario for the wealthiest Americans would be that the upper income tax rate is returned to 39.6 percent, and dividends could then be taxed at that much higher rate, if the Bush tax cuts are left to expire.
For individuals earning $200,000 and couples earning $250,000, there is also the new 3.8 percent tax rate that comes as part of the Affordable Care Act on certain types of income, including dividends, capital gains and rental income.In that case, dividends could be taxed at a steep 43.4 percent for the upper income bracket, and capital gains would be at 23.8 percent for the top rate, if the Bush tax cuts expire without change. Even if the tax cuts were maintained, dividends would be taxes at 18.8 percent for the richest Americans.
Sam Stovall, chief equity strategist at S&P Capital IQ, said dividend-paying stocks have been hit harder than most in recent weeks, in anticipation of higher dividend taxes in 2013, as well as a possible higher capital gains tax.
“The real question is how will investors respond. I think some of these groups will be and have been beaten up because a lot of these investors were riding the momentum wave for high yielders,” Stovall said. “As a result, a lot of these groups were pretty expensive.”
He noted that the high-yielding telecom sector’s forward P/E was 17.5, and it has now fallen to 16.6. Utilities, the market’s worst performers Monday, are now trading on a forward price to earnings ratio of 14 and consumer staples are near 15. The overall market is at 12.2 times 2013 earnings.
“Even though they normally trade at a premium to the market because of their consistent earnings and dividend growth, they do look relatively expensive,” Stovall said. “At the same time they do offer a good dividend yield. Telecom is close to 5 percent, utilities are 4.5 percent, and consumer staples at 3 percent. … It’s almost twice as good as a 10-year note yield.”
Stovall said beyond dividend stocks, the whole stock market is at risk if Congress and the White House fail to work out a deal on the cliff issues. “The stock market will fall off its own cliff,” he said.
Goldman Sachs economists recently wrote that they believe the ultimate outcome on the dividend tax rate will be that it and capital gains would be pushed to 20 percent rate, as favored by Senate Democrats. But the rate would then be nearly 24 percent for the wealthiest tax payers. Other scenarios include dividend tax rates that would be graduated to a higher level for the rich.
“If an investor wants yield, and they also want an investment vehicle linked to growth, then dividend stocks would still seem to be a good place to be,” said John Stoltzfus, chief market strategist at Oppenheimer Asset Management. “In an environment where a market continues to be fairly prone to move from ‘risk on’ to ‘risk off,’ it’s nice to have an investment to pay you while you wait.”
“The Bush-era advantage on dividend stocks was a fabulous deal for investors of all income categories. The question is would that still play to some income levels? We would hope that it would be extended to all investors,” Stoltzfus said. Stoltzfus said baby boomers, in particular, would be looking for high-yielding dividend stocks as a source of income in retirement.
In the past month, the S&P 500 is down about 2.3 percent, but some of the dividend paying sectors were down more. Utilities are by far the worse, down 7.2 percent for the month, and down nearly 6 percent year to date. Telecoms were down 2.7 percent in the past month, but up more than 11 percent for the year.
Steve Massocca, managing director at Wedbush Securities, is portfolio manager of the Wedbush Hedged Dividend Fund, which he says was up 16.8 percent year to date through Oct. 31. He said as investors head for the exits, they are unfairly treating REITs and MLPs just as they are corporate dividend payers. The dividend income from REITs and MLPs is nonqualified and taxed at the individual tax rate.
“I view the selloff in MLPs as a buying opportunity. I view the selloff in all these dividend paying companies as a buying opportunity,” said Massocca.
He pointed to the Alerian MLP (AMLP), which investors have been dumping. “It lends itself to panic selling, and that’s what it looks like right now,” said Massocca.
“Utilities got killed and that makes sense. That’s a qualified dividend,” he said. “It makes no sense with MLPs. They’re not qualified dividends.”
Stovall said a change in the dividend rate could actually be an advantage for MLPs. “REITs will probably look a little more attractive under the new (possible) tax environment because there’s a more level playing field, the same as limited partners,” he said.
Stovall said while the market was down 2 percent in the past 13 weeks, residential REITs were down 4.9 percent and retail were down 2.6 percent. Industrial were 0.4 percent higher.
Some REITs rated buy by S&P are Pennsylvania Real Estate Investment Trust (PEI), which yields 3.9 percent. They also recommend Duke Realty (DRE), yielding 5 percent, CBL and Associates (CBL), yielding 3.8 percent and Home Properties (HME) yielding 4.4 percent.
“With the housing market going through a recovery, with the more leveling possibly of the tax playing field, that could make REITs more attractive on a relative basis,” he said.
Dividend paying stocks that S&P rates buy and are consistent in raising dividends include General Mills (GIS), Altria (MO), Lorillard (LO) and South Jersey Industries (SJI).
“There are companies that our analysts continue to recommend because they have good earnings growth prospects, attractive valuations and above average consistency of raising earnings and dividends,” Stovall said.
November 13, 2012 at 4:49 PM #754639ParticipantFrom that same article:
“Steve Massocca, managing director at Wedbush Securities, is portfolio manager of the Wedbush Hedged Dividend Fund, which he says was up 16.8 percent year to date through Oct. 31. He said as investors head for the exits, they are unfairly treating REITs and MLPs just as they are corporate dividend payers. The dividend income from REITs and MLPs is nonqualified and taxed at the individual tax rate.”November 14, 2012 at 12:22 AM #754658CA renter
ParticipantIn other words, it will be taxed at the same rates as ordinary income. And yet, people are still willing to work for a living, even though they have been very unfairly treated WRT taxes. It’s no wonder everyone wanted to become a “trader” instead of doing something productive. Time to stop our ridiculous obsession with gambling, and get back to work.
The best thing that could ever happen to our economy (and the fairest thing to all taxpayers) would be to tax ALL income at the exact same, steeply progressive rates.
November 14, 2012 at 1:06 AM #754660CoronitaParticipant[quote=CA renter]In other words, it will be taxed at the same rates as ordinary income. And yet, people are still willing to work for a living, even though they have been very unfairly treated WRT taxes. It’s no wonder everyone wanted to become a “trader” instead of doing something productive. Time to stop our ridiculous obsession with gambling, and get back to work.
The best thing that could ever happen to our economy (and the fairest thing to all taxpayers) would be to tax ALL income at the exact same, steeply progressive rates.[/quote]
deleted. whatever….You know CAR. I was gonna post something else…But you know what. I’m gonna take the higher ground on this one…
CAR, we’re talking about investments here. Look at the thread ok? We’re talking about dividend yields, returns etc. NOT about political viewpoints, or fairness….
If you want to harp about folks paying fairshare, can you be so kind as to do it somewhere else, like the other threads instead of hijacking this thread…Ok? Come on…There’s like 3 other threads where you can do this on…Why here?
Seriously, do you have anything to share about investment knowledge here? Unless you have something intelligent to say about investments, why don’t you reserve judgement on this one ok? With all due respect…Some people aren’t as lucky as you who have a guaranteed government pension that doesn’t need to self-manage their own finances you know… Some people actually have to “work” to have their money grow….Think about that one….
November 14, 2012 at 7:11 AM #754663ocrenter
Participant[quote=flu]Speak of the devil…
Bold items are kinda of the issues.
Ummmm..It’s a no brainer……Sell….Dividend play is over…It’s done….
Reaction or over-reaction…People don’t want to take a chance in 2013.They are gonna try to cash out and get this year’s tax rates..
http://finance.yahoo.com/news/why-investors-dumping-dividend-stocks-175502252.html
Why Investors Are Dumping Dividend Stocks
The f[/quote]
Flu, this panic sell off may prove to be a good opportunity for the average 401k investors without expectation of high taxable income at retirement, no?
November 14, 2012 at 9:32 PM #754718Participant[quote=flu][quote=CA renter] With all due respect…Some people aren’t as lucky as you who have a guaranteed government pension that doesn’t need to self-manage their own finances you know… Some people actually have to “work” to have their money grow….Think about that one….[/quote]
Flu,
I do manage our own investments and the bulk of our money came from investments. If taxes were fair across all types of income, we wouldn’t have such a huge disparity in income/wealth in this country. Taking it further, if wages were taxed at a lower rate than investment income, workers would actually be able to dramatically narrow the wealth/income gap between labor and capital. Please explain why this would be a bad thing.
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