Thursday, September 20, 2012

Dividend Decrease

On the heels of the MSFT dividend increase comes a decrease from one of our other holdings, NLY.  Unlike many other companies, NLY seems content to allow its dividend to regularly float up and down based on actual profits, rather than seeking consistency with its dividend from one quarter to the next.  I have read a number of articles on NLY recently which predicted a drop in dividend from Q2 to Q3 based on narrowing spreads between short- and long-term interest rates, so this was not a huge shock.  As we are new investors in NLY, the Q3 dividend will be our first payment that we receive, so it won't feel like a "decrease" to us.  The current yield over 11 percent is still respectable.

As always, I'll keep a watchful eye on the high yielders in our portfolio to ensure that they still meet our investment criteria over the long run.  I am willing to take on some risk with a portion of our investments if it can help to bring up the overall yield.

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