Unlike many other investments one can make, preferred stocks have more "knowns." By that I mean that these securities come with a variety of characteristics (as specified in the prospectus) that allow an investor to tailor their choices to the issues that are most consistent with their personal goals, resources and risk tolerance.
The biggest "known," of course, is that you know exactly how much you are going to be paid each quarter in dividend income and the exact day that the dividend cash is going to show up in your brokerage cash account (unlike common stocks, most mutual funds and ETFs). That known dividend amount and payment schedule also serves to lower the volatility of preferred stock prices since these characteristics remove most value speculators from the market...
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The biggest "known," of course, is that you know exactly how much you are going to be paid each quarter in dividend income and the exact day that the dividend cash is going to show up in your brokerage cash account (unlike common stocks, most mutual funds and ETFs). That known dividend amount and payment schedule also serves to lower the volatility of preferred stock prices since these characteristics remove most value speculators from the market...
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.
