I think in this case, he is correct. If he already earned all the initial money used to buy the shares in the form of dividends, and withdrew this, then if the stock never pays a dividend again and goes to zero, then he hasn't lost any money since he already took out his entire initial investment. But of course of course, the thread title is a bit misleading. Its not that there is zero risk to owning this stock, but simply that his position now has zero risk for him.
Sure, however it's ultimately just a choice of semantics of whether you consider it a part of an open trade or not. Kinda like "a loss doesn't exist until you exit the position", which is not actually true in an unconditional reality either since the price must improve. In his case, the condition is on the past rather than the future. So as described (based on others' inferences, I just glanced over the OP) it's a fairly standard money management strategy, but if the running portion constitutes a large portion of his NAV it's still terribly inefficient to lose it (Kelly).
I did not say it’s risk free. I sad I made it’s risk free. “Lowered risk to Zero». My point was if- AGNC did not shrink divs even when it was $6.25. 1.44/6.25 over 20%. It did not change $.12 p/s p/m for six years. It was downtrends tor past five years. This year is uptrend and volume $3.7B - the biggest for only 7 months. Put your money on money market, buy bonds. I found my way and it’s working. I provided details and proved it works. In my opinion, it still OK to replicate. I am proposing particular AGNC not another REIT stock. They proved consistency. BTW 17% is my achievement, my average price $8.31. $1.44/$8.31 =0.1733 Why guys you did not follow the details I provided, so it wouldn’t be confusions. And finally, I’m not pushing anybody, please, use your common sense !
The point if you are not going to keep your systemic approach for long time, you are not going to achieve your goal.
The REIT companies getting money from mortgage payments, that is how they are getting money to pay dividends.
yeah maybe for a business but dividends have always been a wot imo UNTIL high yield instruments came out with 80% yield.
Folks, I speculated, some of you dunno what REIT company means, and how they operated, and mostly how they pay dividends to you. REIT - real estate investment trust. REIT generates income primarily from rents or mortgage they own. REIT required to distribute at least 90% of their annual taxable income to shareholders. Therefore REIT stock is not growing drastically and pays higher dividends. If REIT company reduces its dividend - stock will shrink drastically. My suggestion to REIT management - if you want your business to succeed - keep your dividends stable !