Could Buying AGNC Investment Stock Today Set You Up for Life?

When investors start saving for the future, they usually focus on increasing their nest eggs. That tends to shift as investors near or enter retirement, when the goal changes to living off that nest egg, which is why many investors look to dividend-paying stocks like real estate investment trusts (REITs). But all dividend payers are not the same and, sometimes, a high yield is an indication of risk, which is why investors considering mortgage REIT AGNC Investment (NASDAQ: AGNC) and its huge 15.5% dividend yield should think twice before hitting the buy button.AGNC Investment is a real estate investment trust, a business structure that is specifically designed to pass income on to investors in a tax-advantaged manner. That said, REITs were created with the intent of allowing small investors access to institutional-level properties, like office and apartment buildings. While AGNC Investment is a REIT, it doesn't buy physical properties like many other REITs.Instead, AGNC Investment buys mortgages that have been pooled together into bond-like securities. This is definitely an institutional-level investment realm, so the basic premise of the REIT structure remains in place. But the mortgage market is very different from buying a building, which most investors can get their heads around pretty easily. Mortgage securities values can be affected by things like interest rates, repayment rates, delinquency rates, and housing market dynamics. In a nutshell, AGNC Investment operates in a very complex niche of the REIT world.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool