Variable rate preferred stocks sound like a good idea, especially during a period of low rates. The idea is that preferred stock investors will be able to ride the wave up when rates start to rise in the future.
In addition to increasing income, this mechanism also offers a degree of principal protection since such securities would theoretically maintain their value as rates go higher.
But the higher dividend payout that many are looking forward to from today's variable rate preferred stocks is unlikely to ever materialize...
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In addition to increasing income, this mechanism also offers a degree of principal protection since such securities would theoretically maintain their value as rates go higher.
But the higher dividend payout that many are looking forward to from today's variable rate preferred stocks is unlikely to ever materialize...
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.
