The Fed came through with a "best of all worlds" move. It cut both the Fed Funds Rate and the Discount Rate by half a point each. The really good news is that the Fed rarely acts in a "one-and-done" fashion. I suspect after yesterday's actions, Chairman Ben Bernanke and company will cut further, taking the Fed Funds Rate to 4.25%, sooner than later.

With that as a backdrop, we should see a steady recovery in shares of our Specialty Financial REITs during the next several months. And with dividend yields ranging from 15%-20% at this time, I feel comfortable legging back into these names at current prices. They all enjoyed a nice pop yesterday and today, so look to buy on short-term dips, as I'm sure there will be a few. For example, housing data released today was negative.

Going into yesterday's Fed policy announcement, it is estimated that over $3 trillion was sitting on the sidelines waiting to see what level of conviction the Fed had toward thwarting the risk of recession. Now it's pretty evident the conviction is there.

Because of the Fed action, I view the worst as being over for the credit crisis. Further, I expect that the four stocks in our portfolio listed above will rally higher in the weeks and months ahead.

If you own these stocks and don't want to raise your exposure, then just be patient and allow the stocks to recover. It will take time, but they are on the long road back to health, effective yesterday.

If you don't own these stocks, leg into them by buying a third now, a third on the next pullback and the last third when they turn back up on big volume.

Volatility remains high and we can fully expect further wide swings in the Specialty REIT sector. But the genie is out of the bottle and I firmly believe the Fed is going to be aggressive at pumping life back into the financial sector.

ACTIONS:

Alesco Financial (AFN) -- change from HOLD to BUY under $7

Crystal River Capital (CRZ) -- change from HOLD to BUY under $20

Deerfield Triarc Capital (DFR)-- change from HOLD to BUY under $11

Thornburg Mortgage (TMA)-- raise Buy Under to $16

I'll see you Friday with the Weekly Update,

Bryan Perry

Editor The 25% Cash Machine