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but what happens if they rise a couple of points? I'm not a mortgage REIT expert but I'd guess that div could be wiped out pretty easily. And then what would happen to the share price?

I was actually wondering the same thing. One would think that it would be worse on a mortgage REIT if rates are dropping because people would refinance at lower rates. Right? Of course if rates go up, then it might deter people from taking on mortgages, so that would hurt them too.

Like you said "...there's no free lunch, which is why you should diversify." EXACTLY!

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