Annaly Capital: What A 9%+ Yield Spread Means For Retirement

Summary

  • The dividend yield spread between Annaly Capital and 10-year Treasury rates is now almost 9.2%.
  • For a dividend stock, such a widespread provides several key advantages for a retirement account seeking current income and income preservation.
  • The widespread provides a thick cushion against the unfolding inflation and interest rate uncertainties.
  • So in terms of the risk premium relative to 10-year treasury yield, its current 10.7% yield is equivalent to the 14% yield at the beginning of the decade.

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NLY and our retirement

This article explains why a stock like Annaly Capital (NYSE:NLY) should be of interest for retirement portfolios; and in particular, the significance of its current dividend yield spread and 10-year Treasury mean for

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Sensor Unlimited is an economist by training with a PhD, with a focus on financial economics. She is a quantitative modeler and for the past decade she has been covering the mortgage market, commercial market, and the banking industry. She writes about asset allocation and ETFs, particularly those related to the overall market, bonds, banking and financial sectors, and housing markets.

Sensor Unlimited contributes to the investing group Envision Early Retirement which is led by Sensor Unlimited. They offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request. Learn More.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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