Annaly Capital Management, Inc. (NLY): The Danger Lurking in Your Next Brokerage Statement

In addition, even stocks geared at generating income haven’t been immune. Mortgage-REIT Annaly Capital Management, Inc. (NYSE:NLY), once the go-to place for high-dividend yields and strong total returns, has plunged 20% since the beginning of April. A steepening yield curve might help mortgage REITs in the long run, but for now, the Fed’s continuing purchases of mortgage-backed bonds hamper Annaly’s ability to maximize its profits. More broadly, rising interest rates hurt a wide range of rate-sensitive stocks, and so you’ll see many dividend-paying stocks having suffered somewhat deeper declines than the broader market.

What to expect
Unfortunately, even if you’re smart enough not to panic-sell in the face of declines that have already occurred, many of the millions of people opening their brokerage statements to this nasty surprise won’t be so disciplined. Therefore, you can expect further selling from emotion-driven investors, and smart buyers will likely wait until that selling pressure ends before jumping in to score bargain-basement bonds.

Don’t be afraid of your brokerage statement, but don’t ignore what it’s telling you either. With many people getting their first taste of losses in a while, you need to prepare for what could become an even bumpier ride in the months to come.

The article The Danger Lurking in Your Next Brokerage Statement originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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