No. of Recommendations: 5
We owned both New Century and Thornburg Mortgage.

We bought New Century in 2006 and in Feb 2007 the price dropped from about $30 to $19 on one day. The share price had been on a steady decline but the dividend had kept our investment above water. As luck would have it, on the day of the big drop we had a limit oorder in to buy if the price dropped below 29. So we picked up another 100 shares at $20. The price trneded lower for the next few weeks and we sold all our shares at $15. This is and was our biggest loss ever. Three days after we sold, the price dropped to about $5. In less than a month the price dropped from $30 a share to $5, and never recovered.

On TMA we bought 1000 shares after it dropped a huge amount figuring it would go bankrupt or recover. As it turned out we lost about $1000. This was pure speculation and we deserved what ever happened--- either the large payback or the loss of our investment.

The only consolation is that we never had more than 1% of our portfolio in mREITs. So while our IRA balance suffered the New Century loss did not have a huge effect on our portfolio.

I posted mainly to say that even a prudent investor who watched their investments closely can lose a big deal. We no longer chase the high yields of mREITs.

Print the post  


Related Boards
Real Estate Investing
This is a great board for Real Estate other than REITs.

Buying & Selling a Home
Get your personal advice about mortgages, agents, etc. here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.