The following video is part of our "Motley Fool Conversations" series, in which analyst Jim Royal and industrials editor/analyst Brendan Byrnes discuss topics across the investing world.

In today's edition, Jim discusses one major thing to watch out for in the market's hottest dividend sector: mortgage REITs. Annaly Capital and American Capital Agency have already reported fourth-quarter numbers, and he sees a disturbing trend for investors who want those huge payouts.