Wednesday, March 7, 2012

AGNC does secondary offering-- Comment on FNMA

At 4:31 the shares are $29.56 down 2.35 % aftermarket. I do not feel this is a big drop yet.  54 million shares are being offered. Silver is rebounding and is at $32.50 at 4:33 pm. One way to hedge prepayment risk that occurrs with REITs like AGNC and CIM or ARR is to buy FNMA. FNMA is helped by any aid to the public or refinance help given to homeowners. The dividends of REITs could be lower but FNMA shares may go up thus balancing your portfolio but keep in mind FNMA has a higher risk grade but it seems the government will not let them fail. FNMA could easily reach $1 by the end of the year so a small investment at 29 or 30 cents a share could go a long way. Now is also a good time for people to pick up some silver bullion or SLV especially if they do not have any yet.

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