Wednesday, September 18, 2019


It was just a matter of time.  In the back of my head, I knew I was going to have to dump Anworth Mortgage Asset Corp (ANH).  

I had purchased this Mortgage REIT back in June of 2014 when I was first starting to divsersify into dividend earning stock.  I had stars in my eyes...

ANH is one of the REITs that manages a leveraged portfolio of residential mortgage-back securities and loans.  I should have stopped there..  but no.

The over 10% dividend rate was too tempting to avoid when you are a rookie and look to grow the portfolio.  It was earning $0.15 per share and it was an easy $150 dollars every three months.

Things were ok until their growth stopped and began shrinking in 2017.  In Q2 of 2018 they cut the dividend from 15 cents to 14.  I did not sell.  I still made over $140.   Then in Q4 of 2018, they dropped to 13 cents.  Then 11 cents in Q2 of this year.  Now they announced a 10 cent dividend, a 9.1% cut.

This dividend cut resulted in a $45.48 cut in my annual dividend.  NOT ACCEPTABLE.  With the dividend increases this month from Verizon and Microsoft and others, I am still down $23.55.  

The dividend cut is making us unhappy

This is a family site or I would spew out profanity like a drunken sailor... I am f'ing doing it in my mind..

Enough.  I learned my lesson.  These high yielding REITs will eventually bring grief the moment the economy begins hitting road bumps.   

I knew that this was not a dividend grower. But I ceded to my financial hedonism.   I bought this, NLY, and AGNC.    Both NLY and AGNC cut their dividend over the past year and I cut my position of each by around 75%.   I am so pissed.

Now with this cut, I am out.   And since AGNC and NLY are never going to grow and most likely will cut their dividend, I am seriously considering selling all three and purchasing some shares that offer a more modest rate, but will grow.  If I cut all three out of my life, I will be down $1,238 annually in dividends.  Dividends that will never grow. And growth is the name of the game.

The growth stocks will have a lower rate, but at least I will be increasing the annual amount without these hits.   I got some thinking to do

What's your take?

Any recommendations on buying at this moment?

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