Is the Fed Killing Your Retirement?

In the following video, Fool analysts Matt Koppenheffer and David Hanson discuss how Federal Reserve actions may change your approach to retirement planning.

Recently, many private investors have been considering stocks that pay higher dividends, specifically mortgage real estate investment trusts, or REITs, as an alternative to low-yield fixed securities. Matt thinks that mortgage REITs, including Annaly Capital Management (NYSE: NLY  ) and American Capital Agency (NASDAQ: AGNC  ) , will have to navigate a challenging short-term interest-rate environment. He explains how short-term interest-rate spreads may affect future dividend yields and stock prices.

Matt also considers how your retirement time horizon may be a crucial factor in deciding to include or hold mortgage REIT equities in your portfolio.

There's no question Annaly Capital's double-digit dividend is eye-catching. But can investors count on seeing that payout stick around?  In The Motley Fool's premium research report on Annaly, senior analysts Ilan Moscovitz and Matt Koppenheffer uncover the key challenges the company faces and divulge three reasons investors may consider buying it. Simply click here now to claim your copy today!

Read/Post Comments (4) | Recommend This Article (5)

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  • Report this Comment On May 26, 2013, at 9:35 AM, jad9000 wrote:

    So, the Fed is making sure retirees get no return on their savings so they can refinance government debt (interest on the debt hasn't risen even though the debt has increased by $7 trillion). Now, their schizophrenic comments on Q3 is screwing with mReits, where savers have had to go to get some return. Shut these clowns down.

  • Report this Comment On May 26, 2013, at 2:02 PM, luckyagain wrote:

    "Is the Fed Killing Your Retirement?"

    The simple answer is "NO". Nowhere in a capitalist society are you guaranteed a high return with complete safety. Safety has a "cost" and that "cost" is a low return. There are plenty of common stock paying 3, 4, or 5% dividends. But they have a higher risk than US government bonds. There are plenty of bonds paying 3, 4, or 5%, but they come with some risk. If you are willing to accept a lower return with more security, buy a municipal bond fund.

    The ETF SPY is paying a 2.3% interest which is much more than most US government bonds.

  • Report this Comment On May 26, 2013, at 5:17 PM, NewYorker535 wrote:

    the FED is smart, first they borrow money from the Treasury nearly for free, with that money they buy T-Bills and take the spread and get the Dividends. Than when they economy has picked up this T-bill will sell for 103 and up. Money found on the street.

  • Report this Comment On May 27, 2013, at 12:43 AM, herky46q wrote:

    Don't know about the Fed so much as Congress and the president by increasing pension contributions from .8 percent to 5 percent of income. That would effectively eliminate the matching contributions for the Thrift Savings Plan.

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