## Are Mortgage REITs Safe?
Mortgage real estate investment trusts (REITs) are companies that invest in mortgages and mortgage-backed securities. They offer investors the opportunity to earn income from real estate without having to own or manage property directly. However, mortgage REITs can be risky investments, and it is important to understand the risks before investing.
**How Mortgage REITs Work**
Mortgage REITs pool money from investors and use it to purchase mortgages and mortgage-backed securities. They then earn income from the interest payments made on these mortgages. Mortgage REITs typically use leverage to increase their returns, which can amplify both their gains and losses.
**Risks of Mortgage REITs**
There are a number of risks associated with investing in mortgage REITs, including:
* **Interest rate risk:** Mortgage REITs are sensitive to changes in interest rates. When interest rates rise, the value of mortgage-backed securities falls, which can lead to losses for mortgage REITs.
* **Credit risk:** Mortgage REITs are also exposed to credit risk, which is the risk that borrowers will default on their mortgages. If a large number of borrowers default, mortgage REITs could lose a significant amount of money.
* **Liquidity risk:** Mortgage REITs can be difficult to sell, especially in times of market stress. This means that investors may not be able to get their money out of a mortgage REIT quickly if they need to.
**Are Mortgage REITs Safe?**
Whether or not mortgage REITs are safe depends on a number of factors, including the economic environment, the interest rate environment, and the credit quality of the mortgages that the REIT invests in. In general, mortgage REITs are more risky than other types of REITs, such as equity REITs. However, they can also offer higher returns.
Investors who are considering investing in mortgage REITs should carefully consider the risks involved. They should also diversify their investments and not put all of their money in a single mortgage REIT.
**How to Invest in Mortgage REITs**
Mortgage REITs can be purchased through a broker or financial advisor. There are a number of different mortgage REITs to choose from, so it is important to do your research and find one that meets your investment goals.
**Conclusion**
Mortgage REITs can be a risky investment, but they can also offer higher returns than other types of REITs. Investors who are considering investing in mortgage REITs should carefully consider the risks involved and diversify their investments.
## Additional Tips for Investing in Mortgage REITs
* Consider investing in a diversified portfolio of mortgage REITs. This will help to reduce your risk of losses.
* Invest for the long term. Mortgage REITs can be volatile in the short term, but they have the potential to provide solid returns over the long term.
* Rebalance your portfolio regularly. As your investment goals and risk tolerance change, you may need to rebalance your portfolio to ensure that it still meets your needs.
## List of Mortgage REITs
* Annaly Capital Management (NLY)
* American Capital Agency Corp. (AGNC)
* ARMOUR Residential REIT (ARR)
* Chimera Investment Corporation (CIM)
* Colony Credit Real Estate (CLNC)
* Ellington Financial (EFC)
* Invesco Mortgage Capital (IVR)
* New Residential Investment Corp. (NRZ)
* Orchid Island Capital (ORC)
* Starwood Property Trust (STWD)