Monday, October 27, 2014

Preferred Stock Market Snapshot: Investment Grade Preferred Stocks Available Below $25

With the third quarter of 2014 now behind us, the number of investment grade preferred stocks selling for a market price below $25 is now at 71. While 71 candidates is much lower than the 167 we started the year with, it is still plenty for preferred stock buyers to pick from.

A strong retail sales report on September 11 pushed preferred stock prices lower for the second consecutive month. The implication was that if retail sales are picking up, inflation cannot be far behind so the Fed will surely be bumping up rates any time now. But when global oil prices fell during early October, speculators had the opposite reaction -- lower fuel costs drive prices down, which is sure to postpone any thoughts the Fed may have about raising rates.

Those reacting to such events are applying the short-term thinking of a value investor (buy low, sell high) to a long-term income investment (preferred stocks), which often creates buying opportunities for preferred stock investors who are paying attention...

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