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.
Brendan Byrnes has no positions in the stocks mentioned above. Jim Royal owns shares of Annaly Capital Management. The Motley Fool owns shares of Chimera Investment and Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.