As the Federal Reserve tries to decipher the economic tea leaves and the rest of us try to second guess what the Fed's conclusions will be, the dividend income of preferred stock investors has realized a nice uptick.
Rates go up and down over time and the last thirteen years have been no exception. As rates fluctuate, your preferred stock portfolio will swing from favoring dividend income (during higher rate/lower price periods) back to favoring capital gain income (once rates fall again, pushing up the price of your shares).
It is for this reason that savvy preferred stock investors are long-term investors, taking advantage of the known inverse relationship between rates and prices over time. Those trying to apply shorter-term investing strategies to a preferred stock investment frequently exclude themselves from the opportunity to take advantage of longer term rate and price changes...
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Rates go up and down over time and the last thirteen years have been no exception. As rates fluctuate, your preferred stock portfolio will swing from favoring dividend income (during higher rate/lower price periods) back to favoring capital gain income (once rates fall again, pushing up the price of your shares).
It is for this reason that savvy preferred stock investors are long-term investors, taking advantage of the known inverse relationship between rates and prices over time. Those trying to apply shorter-term investing strategies to a preferred stock investment frequently exclude themselves from the opportunity to take advantage of longer term rate and price changes...
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.
