Monday, March 4, 2013

How Well Do Government Money Rates Predict Preferred Stock Dividend Trends?

Preferred stock investors are frequently advised to keep a sharp eye on the interest rates of various government instruments as a sort of indicator of what they can expect for the dividend rates to be offered by new preferred stocks. But the actual data show little or no relationship between the direction of U.S. government money rates and the direction of preferred stock dividend rates.

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