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Category: risk analysis

Risk Analysis ARR

Posted on October 26, 2012 in dividend investing in focus risk analysis

Today I want to take another look at the subject of yesterday’s In Focus… post: ARR.Yesterday we looked at some of the benefits of this stock and talked a little bit about why it might be a good investment. One thing we should never forget, however, is to analyze the risks associated with any investment. And given the fact that ARR is a REIT, there are plenty of risks to consider.

To begin, let’s remember how ARR goes about it’s business. ARR sells short term debt (repurchase agreements, or repos), buys longer term debt (typically GSE MBSs, or Government Sponsored Entities Mortgage Backed Securities), and the difference is the gross yield margin. That’s it in a nutshell. (more…)