3166: Cash Flow Investments: REITs and Agency Mortgages by JT McGee with The College Investor

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🗓️ 4 June 2025

⏱️ 12 minutes

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Summary

Discover all of the podcasts in our network, search for specific episodes, get the Optimal Living Daily workbook, and learn more at: OLDPodcast.com. Episode 3166: JT McGee explores the world of mortgage REITs, explaining how they generate impressive dividend yields by leveraging government-backed and non-agency mortgage securities. He outlines the key risks tied to interest rate movements and offers practical insights on how REITs can fit into a diversified, income-focused portfolio for investors seeking alternatives to traditional fixed-income assets. Read along with the original article(s) here: https://thecollegeinvestor.com/3589/cash-flow-investments-reits-agency-mortgages/ Quotes to ponder: "By law, REITs must return 90% of their operating earnings back to shareholders in the form of dividends." "A bet on any mortgage REIT is essentially a wager that rates will increase very slowly over the next few years." "For income purposes, nothing will beat a mortgage REIT." Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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1:08.1	This is Optimal Finance Daily. Cash flow investments,
1:13.6	REITs and agency mortgages by J.T. McGee with thecollege investor.com. Real estate investment
1:22.2	trusts, REITs, are a favorite among cash flow seeking investors. By By law, reeds must return 90% of their operating
1:30.4	earnings back to shareholders in the form of dividends. While this similarity makes reeds look
1:36.5	like cookie-cutter investments, they're anything but. Let's run through the several different
1:42.1	types of mortgage reed investments.
1:45.0	Number one, agency mortgage reeds.
1:49.0	Agency mortgage rates hold mortgage-backed securities that are insured by the federal government
1:54.0	through agencies like Freddie Mac and Fannie Mae.
1:57.0	These securities are perceived to be safer because the risk of default is insulated by
2:02.2	Freddie and Fannie balance sheets, which are further backstopped by the financials of the U.S.
	...

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