Originally Posted by bucksfan2
@JaxRed since you seem well abreast in the REIT I would like your opinion. I have owned NLY for a couple of years now. I am in the red but the dividend is pretty nice. Its one that I have owned and really refused to do anything with because it fluctuates all over the place. I have had my eyes on IRC which is more of a property play instead of a mortgage play. It doesn't bounce all over the place and pays a smaller but more stable dividend.
Any thoughts on these two?
I don't want to steal JaxRed's thunder at all since he sounds highly educated in dividend paying investments, but dividends are never guaranteed.
If you have a stock that's in the red, and the only reason you have it is for the dividend yield I would caution you against holding it much longer. If NLY chooses to stop paying dividends, your not going to get your yield and subsequently you'll fade even deeper into the red since they'll be a mass exodus at that point.
There's nothing wrong with dividend stock investments. In fact, I would encourage it to the right investor. However, 95% of the country doesn't truly understand the risk involved. Many times retirees get their investment tips from the golf course instead of someone trained and licensed in the field. Certainly, dividend paying stocks are a nice diversification strategy to a balanced portfolio. The problem is many folks get in way too deep with money their actually planning on using in retirement.
It seems like JAXRED here is using the ROTH for his daughter. I don't know how old she is and if he's planning on using the funds for college for her, but in most scenario's people haven't saved enough for retirement to warrant the holding of individual stock's that pay beyond the norm in dividends.