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How the Fed Is Setting Up an Epic Carry Trade for mREITs

In just a few short weeks, the Federal Reserve will adjourn from another meeting of its Federal Open Market Committee. Over the next minutes, days, weeks, and months, the markets will digest the Fed's actions, words, and policies. Some opportunities will fall by the wayside, while others will come to the forefront. 

For the big names in the mREIT sector -- American Capital Agency  (NASDAQ: AGNC  ) ,  Annaly Capital Management  (NYSE: NLY  ) , Hatteras Financial  (UNKNOWN: HTSI.DL  ) , Invesco Mortgage Capital  (NYSE: IVR  ) , and others -- the coming actions from the Federal Reserve could be an opportunity to regain the losses incurred over the past few months. 

In the video below, Motley Fool contributor Jay Jenkins explains a circumstance where, driven by the strong recovery in real estate, mortgage REITs could earn big profits from a carry trade delivered by the Fed on a silver platter.

With so much of the financial industry getting bad press these days, it may be a "greedy when others are fearful" moment. Not surprisingly, some of Warren Buffett's biggest investments are in the space. In the Motley Fool's free report, "The Stocks Only the Smartest Investors Are Buying," you can learn about a small, under-the-radar bank that's too tiny for Buffett's billions. Too bad, because it has better operating metrics than his favorites. Just click here to keep reading.

Read/Post Comments (2) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 16, 2013, at 9:34 AM, promommyfool wrote:

    Getting anoyed with many analyist articles about this sector.

    1. Fed actions bad,

    2. Fed ending actions bad.

    This is the first article I've seen in a while that suggests Reit's are not about to fold and die.

  • Report this Comment On August 19, 2013, at 10:55 AM, MorganMerrill wrote:

    If 12 o'clock is party in the streets and 6 o'clock is doom and gloom, the REIT's are on sale and it's about 7 o'clock.

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Related Tickers

9/26/2016 4:00 PM
AGNC $19.82 Up +0.12 +0.61%
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IVR $15.29 Down -0.14 -0.91%
Invesco Mortgage C… CAPS Rating: *****
NLY $10.92 Up +0.13 +1.20%
Annaly Capital Man… CAPS Rating: ****