Finally Qaddafi is dead! In Arabian world, 2011 would go as historic year. What started as Arab Spring movement would most likely end rule of 4-5 dictators who have been ruling various countries from 30-40 years. On economic front, European mess continues and that keeps world stock markets on roller-coaster ride. Oct is turning out to be much better than Aug/Sept but wait till European leaders miss the opportunity on this weekend again. Markets are hopeful that finally Europe would put some credible plan to resolve its mess. But most likely people are going to be dis-appointed with the news coming out on Monday and markets would sea-saw again! So be very careful with your investments. Right now its better to be in cash or cash-generating investments. This is where I would recommend considering some high-yielding mREITs. These stocks are risky investments but due to their yields, they at least provide some kind of cushion against downside. Here are some names:
- AGNC: $27 Yield: 19%
- CIM: $2.90 Yield: 18%
- IVR: $14 Yield: 22%
- CYS:$12 Yield: 18%
- NCT: $4 Yield: 14%
- If you don't want to risk on individual stocks, check out ETF - REM: $12 Yield: 12%
You can increase yield further by selling "covered call" options on your positions. Since Fed has almost guaranteed no interest rate hike for next 2 years, it would be safe to assume that these stocks would relatively hold their values and yields for next 6 quarters. However be careful to consider selling as soon as first interest rate hike is considered by Fed since these stocks are extremely sensitive to interest rates.
For all readers, Happy Diwali!
/Shyam
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