Are Preferred Stocks even worth it?

[Toro]

It depends on the preferred stock.

They can be illiquid, or difficult to sell.

I'd also agree that they could come under pressure when interest rates rise.

You shouldn't buy it just for the yield. Too many people have been buying for the yield, and that has made many investments overpriced and vulnerable to a pullback.

 

[william the wie]

It depends on the preferred stock.

They can be illiquid, or difficult to sell.

I'd also agree that they could come under pressure when interest rates rise.

You shouldn't buy it just for the yield. Too many people have been buying for the yield, and that has made many investments overpriced and vulnerable to a pullback.

Rep coming your way. I couldn't figure out any better euphemism than promiscuous rent seeking, which obviously is not a huge improvement over the usual term of endearment for this behavior. Sorry, I got the spread rep message when I hit Toro's button. Will someone cover for me, please?

 

[Zander]

It depends on the preferred stock.

They can be illiquid, or difficult to sell.

I'd also agree that they could come under pressure when interest rates rise.

You shouldn't buy it just for the yield. Too many people have been buying for the yield, and that has made many investments overpriced and vulnerable to a pullback.

Totally agree with your comments about chasing yield.

 

[Moonglow]

I put my money in land. My initial investment vs my current value is +4x yield.

 

[Geaux4it]

I heard the bell so came to see whats up.

I'm a market timer and have done well, with the exception of last year when the buy and holders out performed us timers. Still made ~12% last year. I have a Barclays account but am working the NASDAQ and S&P 500 from the cheap seats

Start early, dollar cost average on the downturns, jump in an earn 2% then get out and always keep an eye on that little dirty chart otherwise known as the VIX lol

-Geaux

 

[asterism]

Preferred stocks have historically been the "buy and hold and leave the equities to your heirs" type of investments. In the past, they were typically more stable investments due to their place in the liquidity pecking order and their traditionally higher yields than the common stocks.

Today I don't think that's the case due to overvaluing based on the "security" of them. In public companies for small (anyone smaller than an Institutional Investor) investors they are glorified junk bonds. At best a preferred stock will provide a relatively high dividend without the capital appreciation common stock for the same company would have and at worst you are higher on the food chain for a liquidation so you have a larger share of a worthless company (you get a higher percentage of zero).

That's my 2¢

 

[AVG-JOE]

I wouldn't invest in stocks, annuities of any kind, Wake. I'd pay the penalties for anything holding my money and cash out right now.

I'm long in every market and betting it all on Momma's little bastards.


Have you kids reached the stars yet?

`​

 

[editec]

I like the concept of these kinds of stocks. You buy them, and sit on them while they generate dividends every quarterly or monthly period.

However, one thing that's been popping up lately is that these stocks shouldn't be used because of rising interest rates.

Should investors consider preferreds? Is an APY around 6.5%-8% good?

-Edited out Mentions List in spoiler tag-

It DEPENDS entirely on how the corporation structured the STOCK'S PREFERENCES.

I'd say an APY of 6.5-8% is a good return in this market...especially if you are also getting a reduction in risk associated with most Preferred stocks.

 

[RKMBrown]

I like the concept of these kinds of stocks. You buy them, and sit on them while they generate dividends every quarterly or monthly period.

However, one thing that's been popping up lately is that these stocks shouldn't be used because of rising interest rates.

Should investors consider preferreds? Is an APY around 6.5%-8% good?

-Edited out Mentions List in spoiler tag-

It DEPENDS entirely on how the corporation structured the STOCK'S PREFERENCES.

I'd say an APY of 6.5-8% is a good return in this market...especially if you are also getting a reduction in risk associated with most Preferred stocks.

Depends is the best answer. Every stock is different, and every stock is a risk. But then, not investing is also a risk.

That said, the gambling house welcomes you to the table, belly up!

 

[Synthaholic]

The best way to choose stocks is to go into the marketplace and see what is selling. The population is getting very top heavy with older folks. Items that they use should be good investments.

uhh...wh-whut?

 

[Rocko]

There are some banks that offer nice preferred stocks.

 

[sjay]

There are some banks that offer nice preferred stocks.

What a profound statement,it tells me everything about nothing.I wish there were more guys like you in the markets.I could make a fortune doing everything the complete opposite of what your'e doing.

 

[Sallow]

The best way to choose stocks is to go into the marketplace and see what is selling. The population is getting very top heavy with older folks. Items that they use should be good investments.

uhh...wh-whut?

I just skipped over that.

 

[Rocko]

One option I like if you're in to chasing yields are MLPs (master limited Partnerships). They're different from preferred stock in that they distribute capital profits, where as preferred stock generates interest, so they're taxed differently. I like MLPs for the income and capital appreciation. If you believe in fracking, there the way to go.

 

[Rocko]

There are some banks that offer nice preferred stocks.

What a profound statement,it tells me everything about nothing.I wish there were more guys like you in the markets.I could make a fortune doing everything the complete opposite of what your'e doing.

It is a factual statement. Anyone who knows about the market will tell you the big banks offer the best preferred stocks in the marketplace. As far as you fortune off betting against my market intuition, I'm not going to lie, lately you would have

 

[william the wie]

There are some banks that offer nice preferred stocks.

What a profound statement,it tells me everything about nothing.I wish there were more guys like you in the markets.I could make a fortune doing everything the complete opposite of what your'e doing.

It is a factual statement. Anyone who knows about the market will tell you the big banks offer the best preferred stocks in the marketplace. As far as you fortune off betting against my market intuition, I'm not going to lie, lately you would have

Thus illustrating my extremely strong preference for hedges that permit a profit run but keep my losses small when everything goes south.

 

[Rocko]

The best way to choose stocks is to go into the marketplace and see what is selling. The population is getting very top heavy with older folks. Items that they use should be good investments.

uhh...wh-whut?

I just skipped over that.

What's so funny about taking advantage of weak sellers in the market?

 

[Mac1958]

One option I like if you're in to chasing yields are MLPs (master limited Partnerships). They're different from preferred stock in that they distribute capital profits, where as preferred stock generates interest, so they're taxed differently. I like MLPs for the income and capital appreciation. If you believe in fracking, there the way to go.

You can buy into MLP's via ETF's and get traditional 1099 tax treatment. AMLP, for example. Good yield right now, over 6%.

But yeah, dividend stocks became overvalued when traditional bond yields went into the shitter.

Lord Abbott just put two fascinating studies that show which bond classes react best historically during times of increasing interest rates: Short term corporates, high yield (!), floating rate and convertibles. And, obviously, shorting treasuries with TBT.

.

 

[Rocko]

One option I like if you're in to chasing yields are MLPs (master limited Partnerships). They're different from preferred stock in that they distribute capital profits, where as preferred stock generates interest, so they're taxed differently. I like MLPs for the income and capital appreciation. If you believe in fracking, there the way to go.

You can buy into MLP's via ETF's and get traditional 1099 tax treatment. AMLP, for example. Good yield right now, over 6%.

But yeah, dividend stocks became overvalued when traditional bond yields went into the shitter.

Lord Abbott just put two fascinating studies that show which bond classes react best historically during times of increasing interest rates: Short term corporates, high yield (!), floating rate and convertibles. And, obviously, shorting treasuries with TBT.

.

Didn't know that. Ill look in to AMLP. Does it move?

 

[william the wie]

uhh...wh-whut?

I just skipped over that.

What's so funny about taking advantage of weak sellers in the market?

mixing and matching momentum and fundamental investing will kill your portfolio and there are several variants of both that should not be intermixed. Take a Dow Dogs Strategy other than using Fibonacci numbers (2, 3, 5 & 8) and two fundamentalist screens there is nothing in common about the at least 171 lists of stocks to go long on. And if you are like me and you like to go short the Dow stars you need to use the same system with them to get dependable results.