3 Things You Need to Know If You Buy Annaly Capital Management Today
Most real estate investment trusts (REITs) are fairly simple to understand, but that's not the case for Annaly Capital (NYSE: NLY). If you are looking at this REIT's oversized 14% dividend yield and thinking you've found a great investment opportunity, you'll want to make sure you know these three things before hitting the buy button.
A property-owning REIT buys a building and then leases it out to a tenant. That's basically the same thing you might do if you owned a rental property, and it is fairly easy to understand. Annaly is what is known as a mortgage REIT. It buys pools of mortgages that have been brought together into bond-like securities, often called something along the lines of collateralized mortgage obligations (CMOs). Owning a single mortgage is simple -- owning a pool of mortgages that trade as a single entity is not.
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Source Fool.com
