Thursday, October 6, 2011

What will investors abandon next?

Reason to Pull REITs from the Wreckage

What will investors abandon next? The first bout of jitters in July hit stocks. Then gold took its licks. The latest target: companies that own government-backed mortgages.

After holding up well through the summer, many mortgage real-estate investment trusts have fallen at least 15% in the last month. Such REITs tend to perform better when investors flee risky assets because they invest exclusively in government-agency-guaranteed mortgages. But Capstead Mortgage Corp. and CYS Investments now have valuations below 90% of book value, the lowest in over a year, ...

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