Dividend Yields Up to 20%

Well it has been awhile since my last post primarily because I celebrated my 60th birthday in Las Vegas and am still recovering from that wonderful week and a couple of other weeks of vacation. Now that I am properly rested it is back to the grindstone.

I have issued the July newsletter where I talked about some stocks that yield nearly 20% in dividends. Normally I would not advocate buying any stock with yields this high because it is very likely that there is something seriously wrong with the company whose share price has dropped so precipitously that their dividend yield has risen to double digit numbers meaning that the likelihood that they will pay that dividend is extremely small and it is more likely that they will cut ir eliminate he dividend causing the stock price to fall even further. There are , however, exceptions to every rule or cascading event.

The REIT stocks like Chimera and Anally Capital Management are potential exceptions because they have to pay out 90% of their profits as dividends and they are exploiting the spread in borrowing costs and mortgage rates to make a lot of money. This is goo management and a smart investor can take advantage of the huge dividend yield as long as they keep a close eye on interest rates and sell the stock as soon as there is any sign that interest rates are going to go up in the foreseeable future, likely a year from now. Still, a 15% to 20% return on your investment over a year's time is a pretty good deal if you understand what you are getting into and monitor the situation closely.