Today's elevated share prices for high quality preferred stocks have left many preferred stock shareholders, who are looking at huge but unrealized capital gains building up in their brokerage accounts, wondering if they should sell and pocket the gains now while they can.
We all know that the market price pendulum swings both ways which is actually one of the many positive aspects of preferred stock investing. During times of low prices, preferred stock investors enjoy higher dividend income as yields increase and coupon rates offered by new issues become more generous. When prices go back up, shareholders have selling opportunities that bring income in the form of capital gains to those who choose to sell. Income generation swings back and forth between increasing dividends or increasing capital gains.
But those who realize their capital gains by selling their shares face a dilemma - since prices are so high, what do you then buy if you are to reinvest?...
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We all know that the market price pendulum swings both ways which is actually one of the many positive aspects of preferred stock investing. During times of low prices, preferred stock investors enjoy higher dividend income as yields increase and coupon rates offered by new issues become more generous. When prices go back up, shareholders have selling opportunities that bring income in the form of capital gains to those who choose to sell. Income generation swings back and forth between increasing dividends or increasing capital gains.
But those who realize their capital gains by selling their shares face a dilemma - since prices are so high, what do you then buy if you are to reinvest?...
Note To Readers: This article was chosen to appear on the popular investing website 'Seeking Alpha'.
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.
