Dynex Capital, Inc . (NYSE: DX) CEO Byron Boston describes the current geopolitical and macroeconomic conditions as an “evolving period” in which the mREIT is maintaining a flexible mindset and evaluating multiple scenarios for the future.
Boston, who is also the mREIT’s co-chief investment officer, told the REIT Report that “we're respectful of this evolving period. We're respectful that we may continue to be surprised.” In response, Dynex Capital is carrying more cash and liquidity on its balance sheet, he noted. “Liquidity is absolutely key.”
This year, Dynex Capital will not be trying to predict exactly how far or how fast inflation will go, Boston said. “We are evaluating from a month-to-month basis. We're carrying more cash and liquidity because we feel it is dangerous to try to pick one scenario and structure your portfolio around that one scenario with economic variables being this uncertain, and the potential for exogenous shocks to the economy so high.”
Dynex Capital’s number one strategy, according to Boston, is “how much risk should we take in this environment? We have a flexible enough mindset not to reject the data as it's coming out.”
Boston, who is chair of Nareit’s mREIT Council, also said the global economy sits on a couple of “rickety pillars,” namely large central bank balance sheets and huge amounts of global debt. Attempts to reverse these monetary policies will have an impact on consumers, on investment, and ultimately on government fiscal policy. “All the debt that has been issued globally becomes more of a burden as interest rates rise,” he said.
Meanwhile, Boston urged those with wealth and privilege to share their good fortune with others, especially with people who are working hard to meet their basic living needs.
