Buying Annaly Capital Management Taught Me a Costly Lesson (That Will Pay Dividends in the Future)

Annaly Capital Management (NYSE: NLY) was one of the first real estate investment trusts (REITs) I ever purchased. The sole reason I bought shares was its alluring dividend yield. It was in the high single digits at the time. I remember thinking that the stock price doesn't have to rise very much in order to earn an attractive return.Unfortunately, the stock never gained any value in all my years of owning it. Instead, it steadily eroded as the mortgage REIT issued more shares at lower prices to fund its growth. Making matters worse, Annaly cut its dividend payment several times. My experience with the REIT taught me a valuable lesson: Don't invest in a stock solely because of its dividend yield.I've made a lot of investing mistakes over the years. One that has proven costly more times than I'd care to admit is investing in companies with high dividend yields without considering whether those payouts were sustainable. Instead of seeing a stock with a high yield as a red flag, I often saw it as an opportunity to earn an outsized income stream. While some of those investments have paid off, more often than not, the company with the high-yielding payout eventually cut its dividend payment. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool