Fed Policy Delivers Stable Prices And 7.3% Preferred Stock Dividend Yield

The Federal Reserve's low-to-no interest rate policy has pushed preferred stock investors to the top of the pile for yet another year. For high quality preferred stock shares purchased throughout 2011, preferred stock investors earned about 7.3% at what many would consider to be very low risk. Very few others are making that claim.

Here are the results for high quality preferred stocks, savers (those investing in bank Certificates of Deposit) and common stock investors (as reflected by the S&P 500 common stock index) for 2011.

High Quality Preferred Stock Performance, 2011

Thanks to the Fed's low-to-no interest rate policy, which the Fed has committed to for at least another couple of years, market prices for high quality preferred stocks remained stable throughout the year as did their dividend yields.

As illustrated by Figure 1...

Note To Readers: This article was chosen to appear on the popular investing website 'Seeking Alpha' today.

By clicking here a new window/tab will open on your screen to this article as it appears at SeekingAlpha.com.

Receive my Seeking Alpha articles by email: When viewing one of my articles at Seeking Alpha, click on the "Follow" button under my picture. You will be notified by email when I post a new article to Seeking Alpha.

Please enjoy reading this article at Seeking Alpha.

Many Happy Returns.