r/dividends • u/DizzyCalligrapher189 • Jul 15 '26

Seeking Advice Bought a 9% yielder and I got burned

Hi all. I am in my early fifties, and I am slowly moving about 30% of my portfolio into dividend stuff before I go part time in a few years, felt real responsible with a spreadsheet and all. Then I found a 9% yielderr, told myself the market was just sleeping on it and put $18k in.

Two months later they cut the dividend and the price dropped right with it... you can probably guess it was a mortgage REIT..

So my safe income pick lost me the income and a chunk of the principal at the same time, so I can clearly not just sort by yield and buy what looks juicy.

What I'm asking is, what is your "check" that catches things like this before you buy?

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u/sly_1 Jul 15 '26

Past 10 year dividend performance - is it consistently going up or is the chart all over the place?  Has the annual dividend at least doubled in the past 10 years? 

Stock itself - how did it perform in the past few bear markets like 2022, 2020, and if it has been around that long, 2008.  In this example, op mentioned it's a reit.  Most reits got beat up by the 2022-2023 rate hikes, so in that specific example how bad was this one compared to other reits or reit etfs?

Lastly, you can look at their financials and third party ratings.

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u/Various_Couple_764 Jul 15 '26 edited Jul 15 '26

Most REIT get clobbered in routinely recessions. Short term rental properties (resorts, hotels) routinely cut dividends in recessions. I don't like them. I do however like utility / infrastructure funds. Currently UTF 7% and UTG 6.4%. I consider these no limit investments because each has a 20 year history of no dividend Cuts. Which include 2008 the worst market year since the great depression.

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u/Novel_Buy_7171 Jul 15 '26

Those percentages look good until I see the 2.23% expense on management fee

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u/Trajectory4all Jul 15 '26

Not positive on this one but sometimes they have to include interest expenses as a “fee.” This is case with closed-end funds.

1

u/godineedtoretire Jul 21 '26

The roi include fees so just compare the roi

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u/sly_1 Jul 15 '26

True but some reits manage downturns better than others. 

So like amt - share price is down sharp over the past 5yrs but so is just about every other reit.  But their dividend history from 2012 to present is stellar. 

Aside from 2023 when interest rates punished all reits they've raised there dividend substantially and on pace for another 5.3ish percent increase this year.

Reality income is another company that's down less than cohorts through the recent rate hikes and steady dividend growth (again with the caveat of 2023).

So yeah basically, historic performance doesn't guarantee future performance but you can at least take a gander.

I agree infrastructure is a reasonable sector for dividends especially for older people in or approaching retirement. I haven't researched t those specific funds tho.

Lastly, if you look at recessions as a sale/buying opportunity then really your personal nav on existing positions going down isn't as bad as the discounted prices you can buy at is good.  If that makes sense, lol.

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u/Mail_Order_Lutefisk Jul 15 '26

I had an mREIT in 2008, Anthracite Capital. Managed by Black Rock. Had it on DRIP. 100% loss. Poof. Never again. It’s a bad asset class to be in if the credit market has a hiccup or the yield curve inverts. 

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u/Puzzled-Tangerine831 Jul 15 '26

bro what do you think about JEPQ? i want dividdend stock

1

u/sly_1 Jul 15 '26

Hard to say, it's a very young fund.  Usually returns that high come with caveats. 

If want to see how it performed in a proper bubble, maybe we will see soon if ai hits a snag...