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The Investment Strategy I Use To Make Money Online


  • Capstead Mortgage Corporation carries a very defensive portfolio of agency adjustable-rate mortgages.
  • Because Capstead Mortgage Corporation uses such a conservative investment strategy, their preferred shares usually trade at a lower yield.
  • CMO-E had a great opportunity before they went ex-dividend. These shares are often a top choice for buy-and-hold investors.
  • I used a dividend capture strategy on CMO-E. However, investors planning to buy-and-hold should have entered at the same time.

This article went out to subscribers of The Mortgage REIT Forum on 6/29/2017 along with a real-time text message alert.

This should answer many questions investors have on how to invest.

I've been following the preferred shares for mortgage REITs for a long time and have a good understand on when the market makes a valuation error. Knowing the underlying companies and the metrics for where preferred shares should be valued can be a difficult concept. I will demonstrate some examples of how I've made significant value plays in this market.

About CMO

Capstead Mortgage Corporation (CMO) carries a very defensive portfolio of agency adjustable-rate mortgages. The shares are exceptionally steady during market downturns, compared to preferred shares of other mortgage REITs. They are dramatically steadier than common stock of any mortgage REIT. The difference is substantial. I have been investing in CMO-E over the last several weeks. There were some great opportunities to get in. Whether the investor intends to trade or hold for income, the prices were excellent for entry.

Recent developments

I've got a quick update for subscribers. I'm also going to link to this as a demonstration of why we use the preferred share spreadsheet. The images in here come from screen-shots of the stock charts in my Schwab account.

Recent Developments - CMO-E

Capstead Mortgage Corporation (CMO) had the E-series go ex-dividend.

I was long CMO-E. The preferred shares are great because CMO runs a very conservative portfolio structure, they had some call protection, and the yield was enough for me to want to own them. They rallied leading up to the last few days, had one last gasp higher just before the ex-dividend date hit, and then they opened low. The climb is almost immediate. I saw a few sell orders had executed up to $25.50 so I tried my luck. I entered an

This article was written by

Colorado Wealth Management is a REIT specialist who began his decades-long investment career in a family-owned realtor office before launching his own company and embracing his drive for deep-dive REIT analysis. He holds an MBA and has passed all 3 CFA exams. He focuses on Equity REITs, Mortgage REITs, and preferred shares.

He leads the investing group The REIT Forum. Features of the group include: Exclusive REIT focus analysis, proprietary charts and data models, real-time trade alerts posted multiple times a month, multiple subscriber-only portfolios, and access to the service's team of analysts and support staff for dialogue and questions on the REIT space. Learn more.

Analyst’s Disclosure: I am/we are long MO, WMT, TGT, PM, FSIVX, FSITX, BMNM, WPG, GPMT, SFM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

Looks like folks are bailing out of CMO-E and getting into NLY-F ?
The Aiki Trader profile picture
I nibbled at CMO-E yesterday. Will try again for dividend capture strategy.
Tokyo Picker profile picture
Why is the CMO 5 year chart on Google Finance & ETrade completely different from the chart on Seeking Alpha?
The Aiki Trader profile picture
I am a more recent reader of CWM on SA.
I did fine on my CMO-E trade.
I bought on 6/16/17 at 25.28
Sold on 6/29 at 25.43
and captured the .47 dividend payment to be received next week.
Can't complain.
Thanks CWM for the education.
The Aiki Trader profile picture
doing the happy dance this morning....received my dividend from CMO-E.

Very well document article. Nicely written.
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