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Investing/Strategies / Investing for Income
|Subject: Re: opinions on preferred stocks for income?||Date: 12/22/2011 3:21 PM|
|Author: joelcorley||Number: 915 of 922|
I hold a number of preferred stocks. They come in a lot of varieties. In general preferreds are somewhere between bonds and stocks in terms of risk. Some are more like regular bonds; some more like stock. When you buy, you need to ensure you are likely to get paid for the risk you are taking.
If you want details on individual preferred stocks, give QuantumOnline.com a try. It's free and provides a lot of details about individual securities. Screening for the "best" preferreds can be a problem though. There aren't many tools to do that in part because the terms for a lot of preferreds are non-standard.
Alternately consider adding a preferred ETF like PFF to your holdings. Or you could use a closed end fund like Nuveen's JPS. Be careful of closed end funds though - they tend to be leveraged, which usually works in your favor but not always.
One more thing: Preferreds tend to be long-dated and are usually of fairly low credit quality. So you have to take some risks buying into these. However, preferreds tend to be more liquid than bonds, so you tend to take less of a hit on spreads if you feel you need to get out.
If you have specific questions about preferreds, ask away.
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