Parsimony Inves...'s  Instablog

Our launch this year has been a great success and we want to remain loyal to those subscribers that have shared this special journey with us thus far. That said, we are making a special pledge to all Premium Members that signed up (or will sign up) for our service in 2012:

For our loyal members that signed up for our Premium service in 2012, we pledge to NEVER raise your initial monthly subscription fee ($9.95) for life!

We have many exciting new things planned for the website in 2013 that we know will add to the value subscribers already receive from our service. We are dedicated to doing whatever we can to help you build and manage your portfolios. As our service expands, our monthly subscription fee may also increase in the future. However, as long as you keep your subscription active, your monthly fee will NEVER increase.

If you have been thinking of signing up for our service, please consider taking advantage of this year end offer to "lock in your rate for life". There's only 5 days left to take advantage of this promotion…

The DIY Dividend Portfolio

Most "do-it-yourself" investors fail miserably over the long-term. As a matter of fact, the majority of professional investors fail to beat the returns of the broader market indices every year. That said, there is one common trait that every successful investor shares…an investment plan!

If you don't have a proper investment plan in place for your dividend portfolio, we can help. Don't waste another day "throwing darts" at the stock tables. Our DIY Dividend Portfolio service will provide you with the research necessary to help you build and monitor your own DIY Dividend Portfolio and to help you invest with confidence.

Premium Members have access to all of our dividend research, including:

• DIY Dividend Portfolio Newsletter - This monthly newsletter highlights our stock selection process (using the Parsimony rating system) and each month it includes our 50 highest-rated dividend stocks (The Parsimony 50), which we believe are great candidates for your DIY Dividend Portfolio. In other words, this newsletter helps you decide WHICH stocks to buy.
• The Buy Zone Report - The weekly report highlights all of our top-rated stocks that are currently "actionable" (i.e., stocks currently trading in our target "buy zone"). In other words, this report helps you decide WHEN you should buy a specific dividend stock.
• Option Ideas for DIY Dividend Investors - This report highlights conservative covered call and cash-secured put strategies for our top-rated DIY dividend stocks.
• In addition, our "Model" DIY Dividend Portfolio is managed real-time and subscribers receive regular updates and real-time trade alerts (via email) when changes are made to the portfolio.

What Our Subscribers Are Saying...

"BUY ZONE. Those two words separate Parsimony Investment Research from all the rest! Anyone can pick a stock to invest in, but do you know what is the best price to start an allocation? Parsimony's "Buy Zones" take all the questions out of the buying decision. As a DIY investor, I do not have the time or resources to pour over all the possible dividend stocks in the market. Parsimony Investment Research knows how to dig for those stocks that you may not have on your radar that can give your portfolio that punch it deserves. The reports and statistics found on PIR website cannot be duplicated for the cost. They also teach you how to be "patient." I invest in Parsimony to save me time, insure I'm buying the best stocks at the right prices (buy zones), and to have someone to lean on when I have questions. Parsimony is one investment I'm guaranteed a 100% return on!" J.S. - Cincinnati, OH

"Your systematic approach to dividend stock investing is exactly what I need. Your comprehensive service enables me to easily identify high-quality, dividend-paying stocks, tells me when to buy them, and helps me to manage downside risks. I feel confident that with your guidance I will achieve my objective of generating a safe, reliable stream of income that grows faster than the rate of inflation." P.M. - Box Elder, SD

Read more testimonials...

“The SEC held an open meeting on August 31 in which, among other things, the commissioners of the SEC voted to issue a concept release on interpretive issues related to the status under the Investment Company Act of 1940 of companies, including mortgage REITs, that are engaged in the business of acquiring mortgages and mortgage-related instruments and that rely on the exclusion from the definition of investment company in Section 3(c)(5)(C) of the Act. The SEC is soliciting comments on a wide range of issues, including the interpretation of Section 3(c)(5)(C), and the operation of these companies under the rule.
 

“On behalf of Annaly and on behalf of Chimera Investment Corporation and CreXus Investment Corp., the two REITs that are externally managed by our subsidiary, FIDAC, we look forward to participating in the process that the SEC has initiated.
 

“It is worth noting that the effort set in motion by the SEC does not in any way affect the tax status of REITs, which is a tax election that is regulated by the restrictions and limitations set forth by the Internal Revenue Code. Rather, the SEC’s goal is to focus on issues under the Investment Company Act that have not been reviewed in a formal way since 1960 to see if the staff interpretations in this area should be updated or made more clear and comprehensive.
 

“Each of Annaly, Chimera and Crexus constantly monitors its assets so as to ensure that at all times it is exempt from registration under the Investment Company Act under the well-established precedents and guidelines promulgated by the SEC.
 

“We support the establishment of a clear and comprehensive set of best practices for the operation and management of all mortgage REITs in order to preserve their traditional role in capital formation for residential housing, safeguard their investors and enable them to continue to generate income-based returns for institutional and retail investors.
 

“We look forward to participating in the SEC comment process, and we encourage all the shareholders of Annaly, Chimera and CreXus to also participate. To register a comment over the next 60 days, please use the SEC’s Internet comment form at http://www.sec.gov/rules/concept.shtml or send an e-mail to rule-comments@sec.gov, or simply contact your elected representatives in Congress.”

Parsimony's Take

Clearly, Annaly seems cautiously optimistic about the future for mortgage REITs. However, the big concern for mortgage REITs is that they will lose their ability to employ high levels of leverage if they are subject to the Investment Act.

The table below highlights the current leverage and dividend yields the largest agency-focused mortgage REITs. 



While we view the risk of deleveraging as a low probability, mortgage REIT investors should follow the situation with the SEC very closely. In addition, investors should not be afraid to comment if they disagree with the SEC's stance. We agree with Mr. Farrell and encourage all mortgage REIT shareholders to participate in the comment process.