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The time has come for me to retire.
With my upcoming retirement, I am making my book, Preferred Stock Investing, Fifth Edition, available to you for free download as a special Thank You for your prior interest in my preferred stock research.
After writing five editions of Preferred Stock Investing, 162 issues of the CDx3 Newsletter, 159 issues of our subscriber's newsletter, CDx3 Research Notes, and over 200 preferred stock research articles for Seeking Alpha, Motley Fool and Portfolio Channel, the time has come for me to retire.
Sixteen years ago, I sought to develop a simple way for retirees to earn a respectable return with acceptable risk. After two years of research, I wrote the first edition of Preferred Stock Investing documenting the CDx3 Income Engine, a method to select, buy and sell the highest quality preferred stocks. Our subscription services and our Preferred Stock List database were launched in 2006 for the benefit of income investors and those who advise them.
Preferred Stock Investing, now in its fifth edition, has become one of the highest reader-rated books in the United States.
Preferred Stock Investing, Fifth Edition is now available for free download at PreferredStockInvesting.com (PDF format) or you can click on the following link:
Click here to download your free copy of Preferred Stock Investing, Fifth Edition
As always…
Many Happy Returns,
Doug K. Le Du
Note To Readers: I'm making a change this month. The commentary that I provide each month regarding new preferred stocks is now available with my free monthly 'CDx3 Newsletter' along with other great content, just for preferred stock investors.
To receive my free CDx3 Newsletter at the beginning of each month, visit my website at PreferredStockInvesting.com.
Click the Sign Up button (upper-right corner) and enter the email address where you want to receive your free monthly CDx3 Newsletter.
Many Happy Returns.
Interest rates and the market prices of existing income securities (preferred stocks and bonds) typically move in opposite directions (rates up, prices down). But since the Fed started lowering rates last August, the market prices of U.S.-traded preferred stocks have defied gravity by continuously increasing right along with the upward rate pressure. That finally changed during November. During the month, the average market price of U.S.-traded preferred stocks finally succumbed and fell by $0.32 per share, ending the month at...
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Many Happy Returns.
In anticipation of a drop in rates, preferred stock buyers continued to push up the prices of previously issued higher payers. As the month came to a close, the average market price for all U.S.-traded preferred stocks was $26.02 per share, up $0.09 per share over the last month. October’s thirteen new preferred stocks are offering an average annual dividend (coupon) of...
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Many Happy Returns.
If you are a seller, you should check your brokerage account. With demand so high for U.S.-traded preferred stocks, prices are higher than we have seen in several years. Selling your shares will deliver a nice capital gain (which is generally taxed at a lower rate than regular income). For many, selling your preferred stock shares in this high-priced market is a lot like collecting your future dividend income now, all at once. Buyers and those seeking to reduce their risk continued to push up the prices of previously issued higher payers. As the month came to a close, the average market price for all U.S.-traded preferred stocks was ...
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Many Happy Returns.
After holding off during July to see if the Fed was going to reduce interest rates, preferred stock issuers crept back into the market with five new issues introduced throughout August. In anticipation of a drop in rates, buyers and those seeking to reduce their risk continued to push up the prices of previously issued higher payers. As the month came to a close, the average market price for all U.S.-traded preferred stocks was ...
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Many Happy Returns.
On the supply side of the U.S. preferred stock market, issuers held off during July, waiting to see if the Fed was going to deliver the expected interest rate reduction on July 31 (which they did). On the demand side, expecting a rate drop, market participants had already bid up the price of existing income securities (since they pay a higher dividend than those to be issued after the anticipated rate drop on July 31). As the month came to a close, the average market price for all U.S.-traded preferred stocks was ...
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Many Happy Returns.
With downward pressure on interest rates building over the last several weeks, preferred stock issuers took the opportunity to introduce ten new securities during June. As the month came to a close, the average market price for all U.S.-traded preferred stocks was $25.27, up $0.08 per share over the last month but right where they were twelve months ago. June’s ten new preferred stocks are offering an average annual dividend (coupon) of...
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Many Happy Returns.
Compared to March’s fourteen new preferred stock issues, April was a quiet month. Just four new preferred stocks were introduced during April. But even with this small group, there was some diversity – two pay tax-advantaged dividends while one offers an investment grade rating. There is industry diversity to be found here, too – one property REIT, one energy partnership and two regional banks. As the month came to a close, the average market price for all U.S. traded preferred stocks was...
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Many Happy Returns.
March delivered a spectacular crop of new preferred stock issues, almost all of which are offering cumulative dividends and half come with investment grade ratings. During March, fourteen new preferred stocks were issued (and began trading by press time). As the month came to a close, the average market price for all U.S. traded preferred stocks was $24.93, up $0.21 per share over the last month...
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Many Happy Returns.
The upward pressure on preferred stock prices that we saw during January continued throughout February. As the month came to a close, the average market price for all U.S. traded preferred stocks was $24.72, up $0.15 per share over the last month. The good news is that $24.72 is still below these securities’ $25.00 par value.
February’s six new preferred stocks are offering an average annual dividend (coupon) of 6.5 percent, an average current yield (which does not consider reinvested dividends or capital gain/loss) of 6.5 percent and an average Yield-To-Call (which does consider reinvested dividends and capital gain/loss) of...
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Many Happy Returns.
Preferred stock prices ticked back up throughout January, but are still just below these securities' $25 par value offering an opportunity for buyers.
January’s four new preferred stocks are offering an average annual dividend (coupon) of 7.0 percent, an average current yield (which does not consider reinvested dividends or capital gain/loss) of 6.8 percent and an average Yield-To-Call (which does consider reinvested dividends and capital gain/loss) of...
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Many Happy Returns.
According to Bloomberg News, the French economic meltdown was just one of three primary events that caused investors to sell equity positions worldwide during December - Brexit uncertainty and a significant slowdown in China joined the French turmoil to form the perfect storm.
December's global equity selloff included U.S. preferred stocks, pushing average prices down by $0.67 throughout the month. That price drop pushed up preferred stock yields substantially (now at 7.36%), delivering a spectacular end-of-year bonus to today's preferred stock buyers...
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Many Happy Returns.
The Federal Open Market Committee is scheduled for a two-day meeting December 18 and 19 and is widely expected to increase the federal funds rate for the fourth time this year. November’s five new preferred stocks are offering an average annual dividend (coupon) of 7.3 percent compared to 7.0 percent from October’s new issues.
For preferred stock buyers, upward pressure on interest rates boosts the dividends paid by new issues, increasing your income, and lower prices bring not only cash savings on your share purchases but higher yields since you earn the same dividend income without having to invest as much of your cash; your income, cash balance and yield all respond favorably to the Fed’s interest rates increases...
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Many Happy Returns.
October’s seven new preferred stocks are offering an average annual dividend (coupon) of 7.0 percent, compared to 6.4 percent from September’s new issues.
Over the past couple of months, the average market price of U.S.-traded preferred stocks fell by $0.95 per share, now sitting at $24.49, creating the best opportunity for preferred stock buyers that we have seen since 2016.
Importantly, note that $24.49 is below these securities’ $25 par value. Remember that the par value is what shareholders will receive in cash should the issuing company decide to redeem your shares, so buying shares below par sets you up for a downstream capital gain on top of the regular dividend income provided by these securities...
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Many Happy Returns.
The U.S. preferred stock marketplace experienced a monumental change during September and preferred stock issuers seem to have seen it coming. Increasing rates deliver increased income to preferred stock buyers as the dividends paid by new issues go up. But increasing dividend rates means an increase in dividend expense to the issuing company. While we usually see five or six new preferred stock issues each month, we saw sixteen during September...
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Many Happy Returns.
With consumer spending up, household income up, high employment, GDP growth at an almost unheard of 4.3 percent and consumer confidence hitting historic highs last week, the Fed is certain to continue putting upward pressure on interest rates. But demand for preferred stocks remains high, keeping the average market price at...
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Many Happy Returns.
Preferred stock prices have fallen an average of $0.50 per share so far this year, delivering higher returns to today’s preferred stock buyers. Continuing upward pressure on interest rates is likely to put additional downward pressure on preferred stock prices. But demand for these securities remains high, keeping the average market price at $25.36, $0.36 per share above par...
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Many Happy Returns.
As the first half of 2018 wraps up, higher rates have provided an average price savings of about $0.50 per share to preferred stock buyers. There are currently 121 high quality preferred stocks selling for an average price of $25.09 per share (investment grade, cumulative dividends). 51 of these high quality issues are now selling below their $25 par value, offering an average current yield of...
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Many Happy Returns.
The upward pressure on interest rates that has been building for some time now continues to deliver benefits to preferred stock investors. For the first time since November 2016, there were multiple investment grade preferred stocks issued during May paying 6+ percent dividends. May’s five new preferred stocks are offering an average annual dividend (coupon) of 6.8 percent for the consideration of preferred stock investors...
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Many Happy Returns.
