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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75781  
Subject: Re: Preferred stock links Date: 1/25/2012 1:22 PM
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Before you invest--

1. Make sure you understand call provisions. When can the issue be called and at what price?

2. Be very careful of issues priced over their call price. With interest rates very low, many of the quality issues sell at a substantial premium. Hence, the issue can be called from you at a loss.

3. Check those bond ratings. The high yield issues often have junk bond ratings.

4. Diversification allows you to tolerate a bit more risk, but there are limits. Don't over do the high yield stuff unless you can afford the loss.
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