why I am NOT selling NLY
OK, I bought NLY probably at the top. Yield was in the mid 'teens. Huzzah! Wait, price has gone down a stomach-churning 25%. Worse, the dividend has been cut. Oops. Clearly a mistake. Am I going to sell?
If I did, I would be making the classic investor mistake: buying high and selling low. The original thesis for this investment is still valid: I want the income stream. The fact that the underlying security fluctuates in value is not relevant, as I have no intention of selling it.
I jiggled the numbers in a spreadsheet, and even with the reduced dividend, I am still making nice, fat 10% return on my original investment amount. This one is a keeper.