Investing in Financials: A Wild Ride
After a long discussion with an investment banker, I took his advice and invested some money in an REIT called Alesco Financial (AFN), then trading at $2.83 with a P/E of 2. Over the next few days, the stock rose steadily to a high of $4.99. Awesome! Then it began to decline, dropping to $2.93 over the next four trading sessions— still in plus territory, though.
On May 14, AFN was the big loser of the day, losing 1/4 of its value and dropping to a low of $2.30. Ouch! Then the next day, it gained most of it back, hitting a high of $2.97— once again leaving me in positive territory. Yesterday, it was down again, closing at $2.66.
The moral of the story is, financials can be a rollercoaster right now— don't invest more than you can afford to lose. The good news: AFN pays a dividend of $1 per year (and expects to continue paying it for 2008), not bad for a stock trading between $2 and $3 per share!
On May 14, AFN was the big loser of the day, losing 1/4 of its value and dropping to a low of $2.30. Ouch! Then the next day, it gained most of it back, hitting a high of $2.97— once again leaving me in positive territory. Yesterday, it was down again, closing at $2.66.
The moral of the story is, financials can be a rollercoaster right now— don't invest more than you can afford to lose. The good news: AFN pays a dividend of $1 per year (and expects to continue paying it for 2008), not bad for a stock trading between $2 and $3 per share!
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