Preferred Stock

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elainet7
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Preferred Stock

Post by elainet7 »

Anyone here invest in them for their fixed income
Ric Ferri in a podcast suggested the etf PFFD
Valuethinker
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Re: Prefeered Stock

Post by Valuethinker »

elainet7 wrote: Wed Aug 21, 2019 10:17 am Anyone here invest in them for their fixed income
Ric Ferri in a podcast suggested the etf PFFD
Lots of threads here.

A resounding NO.

1. higher risk than bonds. If something goes wrong, the dividend can be passed. If the company is liquidated, the preference share holders seldom get much or anything (vs. the bond holders).
2. lack the upside of common stock. Conversely if interest rates rise, you have greater sensitivity to that factor (on the downside).
3. the financial sector is the largest issuer - so you are tilting your portfolio towards financial stocks.

If you look at what happened to preference stock funds in 2008-09, they went down like stocks - not much downside protection when it hits the fan.

Over to American posters re tax efficiency - good/ bad.
SovereignInvestor
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Re: Preferred Stock

Post by SovereignInvestor »

Absolutely yes. They market tends to be less.liquid so there's more inefficiencies since large institutions cannot take big positions often.

IMO only sophisticated investors should be here who understand risk and can diversify and capitalize off inefficiencies.

I created a basket of 10-20 preferred stocks for 10-20% allocation in IRA.

They are less risky than stocks. Preferred shares crushed stocks from 1999 to 2013. But they offer much higher returns than just bonds. The issue is upside is limited heavily unless they are bought below par. I only like cumulative ones that are more like bonds. The BBB rated ones I usually buy yield a lot more than BBB bonds usually.

If one only buys financial non cumulative preferred then it concentrates risk and can get crushed in a crisis. I like industrial preferreds with solid ratings and REITS only bought below par in selloffs. Look for BBB rated ones to have 1.5%+ spread to corresponding bond of similar duration to compensate for the risk of preferred having less rights and often limited upside, but if they are bought below par then they don't really have as bad limited upside (unfavorable convexity), so all one gets is just higher yield.

I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
Valuethinker
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Re: Preferred Stock

Post by Valuethinker »

SovereignInvestor wrote: Wed Aug 21, 2019 11:13 am

They are less risky than stocks. Preferred shares crushed stocks from 1999 to 2013.
That's really not a helpful subset of time. You take common stocks from their all time high (US has passed its previous high, many other indices have not). Then you compare it to a hybrid instrument (bond and equity characteristics). From memory the US Long Treasury fell from over 5% yield then (6%) to very low yields (around 2.5%?). So pick stocks on the downward slide from their all time high (and before the current bull market had carried them past) and compare them to bonds. In other words you take stocks through 2 brutal bear markets and bonds through a bull market, and say the latter did better than the former?

To assess risk, you'd also have to look at volatility.

In any case, preferred shares should not be confused with fixed income. They are equity instruments, not debt instruments. (Technically they are hybrids but that means you lose the upside in good times for stocks, and gain downside in bad times for stocks - where you want to own these is as in early 2009 when credit risk is bottoming (although you had to be brave to believe that) and interest rates are headed downwards).
ut they offer much higher returns than just bonds. The issue is upside is limited heavily unless they are bought below par. I only like cumulative ones that are more like bonds. The BBB rated ones I usually buy yield a lot more than BBB bonds usually.

If one only buys financial non cumulative preferred then it concentrates risk and can get crushed in a crisis. I like industrial preferreds with solid ratings and REITS only bought below par in selloffs. Look for BBB rated ones to have 1.5%+ spread to corresponding bond of similar duration to compensate for the risk of preferred having less rights and often limited upside, but if they are bought below par then they don't really have as bad limited upside (unfavorable convexity), so all one gets is just higher yield.

I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
There may be something in this strategy, although with the decline in corporate credit I would be careful.

It's a sophisticated strategy and the question asked simply about investing in a fund or ETF. I doubt the OP knows what a cumulative preferred, or a participating preferred, or a convertible preferred, is?
Last edited by Valuethinker on Wed Aug 21, 2019 11:49 am, edited 1 time in total.
not4me
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Re: Preferred Stock

Post by not4me »

SovereignInvestor wrote: Wed Aug 21, 2019 11:13 am
I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
As you can see this early in the thread, there are different opinions.

I would add that you need to look at different layers. One, preferreds or not? two, which vehicle?

SovereignInvestor's point about the ETF structure is worth noting. Preferreds can be bought individually, in etfs, or funds (at least closed end, I'm not sure if there are open end, but I assume so). Most of the ETFs/funds tend to concentrate in the financial and/or utility companies. This causes more interest rate sensitivity. Their liquidity can be an issue unless you are willing to ride out any downturns. But, buying individual issues may require more expertise/time than you are looking for.

They have a place, but whether you need them in your portfolio is something you should understand.
Valuethinker
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Re: Preferred Stock

Post by Valuethinker »

not4me wrote: Wed Aug 21, 2019 11:38 am
SovereignInvestor wrote: Wed Aug 21, 2019 11:13 am
I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
As you can see this early in the thread, there are different opinions.

I would add that you need to look at different layers. One, preferreds or not? two, which vehicle?

SovereignInvestor's point about the ETF structure is worth noting. Preferreds can be bought individually, in etfs, or funds (at least closed end, I'm not sure if there are open end, but I assume so). Most of the ETFs/funds tend to concentrate in the financial and/or utility companies. This causes more interest rate sensitivity. Their liquidity can be an issue unless you are willing to ride out any downturns. But, buying individual issues may require more expertise/time than you are looking for.

They have a place, but whether you need them in your portfolio is something you should understand.
In essence one is adding credit risk to a portfolio, term risk (interest rate sensitivity) and equity risk.

By increasing correlation between the portfolio and its bond & equity components, that cuts diversification benefit.

You have to believe there is some other factor that is orthogonal (less correlation with) the existing risks in the portfolio. I think that is not likely to be a large percentage as a determinant of their underlying volatility.

In addition if these things are mispriced, as an investor you have to believe they are mispriced *your* way. The argument that they are thinly traded and of less/ no interest to institutional investors is a good one. However are there really no investors who can correctly price these things and deal in them?

There are parallels with our arguments re high yield bonds.

Even if they are diversifying, they cannot be treated as bonds - even investment grade corporate bonds. They move more like stocks - have to be seen as part of the equity part of the portfolio.
SovereignInvestor
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Re: Preferred Stock

Post by SovereignInvestor »

Valuethinker wrote: Wed Aug 21, 2019 11:28 am
SovereignInvestor wrote: Wed Aug 21, 2019 11:13 am

They are less risky than stocks. Preferred shares crushed stocks from 1999 to 2013.
That's really not a helpful subset of time. You take common stocks from their all time high (US has passed its previous high, many other indices have not). Then you compare it to a hybrid instrument (bond and equity characteristics). From memory the US Long Treasury fell from over 5% yield then (6%) to very low yields (around 2.5%?). So pick stocks on the downward slide from their all time high (and before the current bull market had carried them past) and compare them to bonds. In other words you take stocks through 2 brutal bear markets and bonds through a bull market, and say the latter did better than the former?

To assess risk, you'd also have to look at volatility.

In any case, preferred shares should not be confused with fixed income. They are equity instruments, not debt instruments. (Technically they are hybrids but that means you lose the upside in good times for stocks, and gain downside in bad times for stocks).
ut they offer much higher returns than just bonds. The issue is upside is limited heavily unless they are bought below par. I only like cumulative ones that are more like bonds. The BBB rated ones I usually buy yield a lot more than BBB bonds usually.

If one only buys financial non cumulative preferred then it concentrates risk and can get crushed in a crisis. I like industrial preferreds with solid ratings and REITS only bought below par in selloffs. Look for BBB rated ones to have 1.5%+ spread to corresponding bond of similar duration to compensate for the risk of preferred having less rights and often limited upside, but if they are bought below par then they don't really have as bad limited upside (unfavorable convexity), so all one gets is just higher yield.

I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
There may be something in this strategy, although with the decline in corporate credit I would be careful.

It's a sophisticated strategy and the question asked simply about investing in a fund or ETF. I doubt the OP knows what a cumulative preferred, or a participating preferred, or a convertible preferred, is?
Good points. The reality is if someone is asking what are.preferreds then likely it is not right for them because ETFS may have liquidity issue that individual investors like me try to capitalize on and they certainly shouldn't own individual issues.

And if the individual doesn't understand nuances then they may be concentrating their risk and not understand duration, credit risk, call risk, etc.

I have made near S&P returns with substantially less risk by patiently waiting for panic selloff and then buying preferreds at discounts and selling at par. So perhaps my comment was frustration with those who say "Preferreds are bad, avoid".

Most peopLe believe in EMH on here hence bogglehead style. But preferred markets are so far from.efficient since big money cannot take positions in many of them with the ask and bid of a market maybe only able to absorb 6 figures of trading capital coming in every hour without massive movements.

Yes I cherry picked the date but the way people write off preferreds as riskier than binds and lower returning than stocks and therefore useless is so misleading. If there is a slow decline in market without wipe out crash, like japan 1990-present , highly rated diversified preferred shares will likely outperform stocks and bonds.
Last edited by SovereignInvestor on Wed Aug 21, 2019 11:52 am, edited 1 time in total.
SovereignInvestor
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Re: Preferred Stock

Post by SovereignInvestor »

I have bought baby bonds/preferreds on secondary stock exchange that yield a full point higher than the normally placed bonds that institutions would buy, same maturity, coupon, and same lien standing . You bet there are inefficiencies! Normal placements institutions can probably take $5m-$10M ppistons or more. On secondary market...good luck filling orders more than 50K without moving market.

Many preferred shares in BBB range especially REITS tanked ~ 15% in Q4 2018, more than the S&p...even as risk free rates plunged. Probably because of lack of liquidity. So yes they have more risk for the ETF holder when they see their "bind like" investments tank more than the S&P.

Many are up 20% or so since December plus the high yields so I actually have almost none and sold them all recently with the push lower in yields most are above par. Eventually when there is a spike in rates again or a panic in common stocks they will crater again likely as ETFs.

So yes anyone thinking of buying the ETF may want to think again...the high yield bond ETFS have similar characteristics and likely much better liquidity, but the same reason why ETFS are bad is why individual investors can do well.
Topic Author
elainet7
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Re: Preferred Stock

Post by elainet7 »

So where to put fixed income investments today
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jh
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Re: Preferred Stock

Post by jh »

......
Last edited by jh on Thu Aug 06, 2020 12:46 am, edited 1 time in total.
Retirement = 401k/Roth IRA (global balanced fund 75/25 AA using indexes) | Taxable (financial independence?) = Vanguard High Div Yield ETF (VYM)
Longtermgrowth
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Re: Preferred Stock

Post by Longtermgrowth »

elainet7 wrote: Wed Aug 21, 2019 12:12 pm So where to put fixed income investments today
Could always go with online CD's if not comfortable with bond funds at such low yields. Can still find 5 year CD's at close to 3%.

Still can't believe Rick Ferri keeps fixed income, all but two years expenses, in preferred stocks.

I can see putting a portion in them, but wouldn't be comfortable with a large percentage of fixed income there.
Topic Author
elainet7
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Re: Preferred Stock

Post by elainet7 »

all vanguard brokerage cds are callable
do not want outside accounts with different banks
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elainet7
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Re: Preferred Stock

Post by elainet7 »

ric ferri told me he is investing his fixed in PFFD-listen to his podcast with white coat investor I think
Topic Author
elainet7
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Re: Preferred Stock

Post by elainet7 »

yes ric ferri says PFFD is a preferred stock index fund and he keeps 2 yrs expenses in a short term bond fund
Longtermgrowth
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Re: Preferred Stock

Post by Longtermgrowth »

Yes, it was mentioned before here: viewtopic.php?t=242438#p4581780

When searching for that post, I came across thread where Rick posted (first reply in thread) back in 2008 mentioning a few of the risks of preferred stocks: viewtopic.php?t=16295
columbia
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Re: Preferred Stock

Post by columbia »

Valuethinker wrote: Wed Aug 21, 2019 11:28 am
SovereignInvestor wrote: Wed Aug 21, 2019 11:13 am

They are less risky than stocks. Preferred shares crushed stocks from 1999 to 2013.
That's really not a helpful subset of time. You take common stocks from their all time high (US has passed its previous high, many other indices have not). Then you compare it to a hybrid instrument (bond and equity characteristics). From memory the US Long Treasury fell from over 5% yield then (6%) to very low yields (around 2.5%?). So pick stocks on the downward slide from their all time high (and before the current bull market had carried them past) and compare them to bonds. In other words you take stocks through 2 brutal bear markets and bonds through a bull market, and say the latter did better than the former?

To assess risk, you'd also have to look at volatility.

In any case, preferred shares should not be confused with fixed income. They are equity instruments, not debt instruments. (Technically they are hybrids but that means you lose the upside in good times for stocks, and gain downside in bad times for stocks - where you want to own these is as in early 2009 when credit risk is bottoming (although you had to be brave to believe that) and interest rates are headed downwards).
ut they offer much higher returns than just bonds. The issue is upside is limited heavily unless they are bought below par. I only like cumulative ones that are more like bonds. The BBB rated ones I usually buy yield a lot more than BBB bonds usually.

If one only buys financial non cumulative preferred then it concentrates risk and can get crushed in a crisis. I like industrial preferreds with solid ratings and REITS only bought below par in selloffs. Look for BBB rated ones to have 1.5%+ spread to corresponding bond of similar duration to compensate for the risk of preferred having less rights and often limited upside, but if they are bought below par then they don't really have as bad limited upside (unfavorable convexity), so all one gets is just higher yield.

I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
There may be something in this strategy, although with the decline in corporate credit I would be careful.

It's a sophisticated strategy and the question asked simply about investing in a fund or ETF. I doubt the OP knows what a cumulative preferred, or a participating preferred, or a convertible preferred, is?

I know that I don’t.

Preferred stocks are a substitute for ______?
rich126
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Re: Preferred Stock

Post by rich126 »

People looking at preferred stocks now are chasing yield and will be paying over par for the stock. I own wells fargo preferred L. Initially it was $1,000 and 7.5% from wachovia, I believe. I bought some back in 2008 when it dropped well under $1,000.I only wished I had purchased more.
Valuethinker
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Re: Preferred Stock

Post by Valuethinker »

columbia wrote: Wed Aug 21, 2019 8:33 pm
Valuethinker wrote: Wed Aug 21, 2019 11:28 am
SovereignInvestor wrote: Wed Aug 21, 2019 11:13 am

They are less risky than stocks. Preferred shares crushed stocks from 1999 to 2013.
That's really not a helpful subset of time. You take common stocks from their all time high (US has passed its previous high, many other indices have not). Then you compare it to a hybrid instrument (bond and equity characteristics). From memory the US Long Treasury fell from over 5% yield then (6%) to very low yields (around 2.5%?). So pick stocks on the downward slide from their all time high (and before the current bull market had carried them past) and compare them to bonds. In other words you take stocks through 2 brutal bear markets and bonds through a bull market, and say the latter did better than the former?

To assess risk, you'd also have to look at volatility.

In any case, preferred shares should not be confused with fixed income. They are equity instruments, not debt instruments. (Technically they are hybrids but that means you lose the upside in good times for stocks, and gain downside in bad times for stocks - where you want to own these is as in early 2009 when credit risk is bottoming (although you had to be brave to believe that) and interest rates are headed downwards).
ut they offer much higher returns than just bonds. The issue is upside is limited heavily unless they are bought below par. I only like cumulative ones that are more like bonds. The BBB rated ones I usually buy yield a lot more than BBB bonds usually.

If one only buys financial non cumulative preferred then it concentrates risk and can get crushed in a crisis. I like industrial preferreds with solid ratings and REITS only bought below par in selloffs. Look for BBB rated ones to have 1.5%+ spread to corresponding bond of similar duration to compensate for the risk of preferred having less rights and often limited upside, but if they are bought below par then they don't really have as bad limited upside (unfavorable convexity), so all one gets is just higher yield.

I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
There may be something in this strategy, although with the decline in corporate credit I would be careful.

It's a sophisticated strategy and the question asked simply about investing in a fund or ETF. I doubt the OP knows what a cumulative preferred, or a participating preferred, or a convertible preferred, is?

I know that I don’t.

Preferred stocks are a substitute for ______?
They are somewhere between
columbia wrote: Wed Aug 21, 2019 8:33 pm
Valuethinker wrote: Wed Aug 21, 2019 11:28 am
SovereignInvestor wrote: Wed Aug 21, 2019 11:13 am

They are less risky than stocks. Preferred shares crushed stocks from 1999 to 2013.
That's really not a helpful subset of time. You take common stocks from their all time high (US has passed its previous high, many other indices have not). Then you compare it to a hybrid instrument (bond and equity characteristics). From memory the US Long Treasury fell from over 5% yield then (6%) to very low yields (around 2.5%?). So pick stocks on the downward slide from their all time high (and before the current bull market had carried them past) and compare them to bonds. In other words you take stocks through 2 brutal bear markets and bonds through a bull market, and say the latter did better than the former?

To assess risk, you'd also have to look at volatility.

In any case, preferred shares should not be confused with fixed income. They are equity instruments, not debt instruments. (Technically they are hybrids but that means you lose the upside in good times for stocks, and gain downside in bad times for stocks - where you want to own these is as in early 2009 when credit risk is bottoming (although you had to be brave to believe that) and interest rates are headed downwards).
ut they offer much higher returns than just bonds. The issue is upside is limited heavily unless they are bought below par. I only like cumulative ones that are more like bonds. The BBB rated ones I usually buy yield a lot more than BBB bonds usually.

If one only buys financial non cumulative preferred then it concentrates risk and can get crushed in a crisis. I like industrial preferreds with solid ratings and REITS only bought below par in selloffs. Look for BBB rated ones to have 1.5%+ spread to corresponding bond of similar duration to compensate for the risk of preferred having less rights and often limited upside, but if they are bought below par then they don't really have as bad limited upside (unfavorable convexity), so all one gets is just higher yield.

I don't think the ETFs may be that good since it's less liquid market and they are probably the ones dumping into panics when people want to sell the ETF that creates inefficiencies mentioned above.
There may be something in this strategy, although with the decline in corporate credit I would be careful.

It's a sophisticated strategy and the question asked simply about investing in a fund or ETF. I doubt the OP knows what a cumulative preferred, or a participating preferred, or a convertible preferred, is?

I know that I don’t.

Preferred stocks are a substitute for ______?
They are somewhere between debt and equity


As several posters here point out they generally should not be bought at over par value.

Wait until there is a recession or interest rates go shooting up and there may well be some bargains.

I don't think there will be a recession or bear market until after the US electoral cycle is resolved. But there will be opportunities for the patient.

Just do not confuse these with fixed income instruments like investment grade bonds. They will be significantly more volatile. They are a form of equity.

The Etfs pose a particular risk because most preference shares are not liquid. A liquid etf on top of an illiquid asset poses significant risks.
Topic Author
elainet7
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Re: Preferred Stock

Post by elainet7 »

Where is everyone investing fixed income nowadays, Total Bond?
balbrec2
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Re: Preferred Stock

Post by balbrec2 »

elainet7 wrote: Wed Aug 21, 2019 10:17 am Anyone here invest in them for their fixed income
Ric Ferri in a podcast suggested the etf PFFD
Found this, pretty much sums up my feelings on preferred's,

n many ways, the insulation preferred stock appears to offer shareholders can seem attractive, but the truth is preferred stock, generally speaking, doesn't make much sense for individual investors.

On the other hand, preferred stock investments can be a goldmine for corporate portfolios. Federal tax laws only require companies to pay income tax on 30% of their preferred dividends, meaning a full 70% is essentially tax-free. This tax exemption is not available to individual investors.

An individual portfolio will probably receive a higher after-tax yield by investing in corporate bonds—when rates are attractive—or municipal bonds if you are in a higher tax bracket. To determine if corporate bonds or municipal bonds offer a higher after-tax yield, you need to calculate the taxable equivalent yield. Equally as important is that as a bond investor, you'll likely receive a senior claim should the underlying company fail as opposed to the subordinate or junior position offered by most preferred stocks.

No matter what you do, it might be wise to remember the adage of legendary investor, teacher, and money manager, Benjamin Graham, who emphatically stated that it was almost always a mistake for an investor to buy a preferred stock issue at or near par value as history has repeatedly shown, if they are patient enough, the opportunity to own it at substantially reduced values will most likely present itself.
Topic Author
elainet7
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Re: Preferred Stock

Post by elainet7 »

thanx most assets in ira
and some cds are being called
tough arena for seniors seeking income
Valuethinker
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Re: Preferred Stock

Post by Valuethinker »

elainet7 wrote: Fri Aug 23, 2019 7:29 am Where is everyone investing fixed income nowadays, Total Bond?
That or Bank CDs within the FDIC limits per institution.

We would say as Bogleheads that is is better to spend down capital than to pursue higher fixed income returns via chasing yield. That as an investor you should only care about total return, not whether the return comes from dividends (interest, if from a bond fund) or from capital gains. The exception is they have different tax consequences, depending.
Topic Author
elainet7
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Re: Preferred Stock

Post by elainet7 »

Think Rick Ferri's advice is sound and will use PFFD for some of my portfolio
it is relatively new, 2017
garlandwhizzer
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Re: Preferred Stock

Post by garlandwhizzer »

Preferred stock has higher risk/volatility than bonds but with the expectation of higher returns. Preferred has lower expected returns than equity but with lower risk/volatility. Preferred stock is in the intermediate risk/reward tradeoff zone like high yield bonds which Rick also employs in portfolio construction. Rick is an accomplished and knowledgeable investor and he uses this intermediate zone of risk/reward tradeoff rather than constructing a portfolio with just equity (very high risk) and bonds (very low risk). Larry on the other hand, also a knowledgeable and accomplished investor, argues against these high yield bonds and preferred stock to the best of my knowledge. Using either approach a portfolio can be constructed by a skilled investor adjusting the relative weights of assets to achieve the desired balance between risk and reward. Rational arguments can be made in both directions as to which is best. Like many decisions in investing I don't think there is one right way to do it that fits everyone. It's a grey rather than a black and white investing world we live in IMO. What works best is very period dependent and although past periods are known, the future always carries a high level of non-predictability. Data mining can tell you with certainty what worked best in the past over a given time frame but not in the future over a given time frame.

Garland Whizzer
straws46
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Re: Preferred Stock

Post by straws46 »

I own some preferred stocks and some municipal bonds. Both are being redeemed. Almost every bond with a coupon over 3.5% I have is being called and paid off with the proceeds of new issues. Since I always bought with the "yield-to-worst" in mind, I haven't suffered except being unable to replace the yield.

I bought some JP Morgan referred shares that had a 6.3% coupon. They are being redeemed and I did pay a premium but I owned them long enough that the interest gain more than made up for the loss I will realize next week when they are redeemed. However, I am not smart enough to know how long it will be before an issue is redeemed so I would have a hard time paying much more than the redemption value.

Preferred can be a solid investment but all of the terms are written for the benefit of the issuer: non-cumulative, perpetual maturity, redeemable at will, non-callable.
Topic Author
elainet7
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Re: Preferred Stock

Post by elainet7 »

these low rates and going lower will put us all in a tizzy
I gotta think rick ferri is quite knowledgeable
I have owned vanguard hi yield for a long time and read vanguard is best at buying up the highest rated junk bonds
capjak
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Re: Preferred Stock

Post by capjak »

Yes have investments in preferred stock but not any index funds, mostly utilities that are investment grade and are qualified as well as >6% dividend. However I do own WFC-L (Wells Fargo preferred only pays around 5% dividend but has about a 20% growth as well with is unusual for a preferred). Most individual preferred are not very liquid and therefore price does not vary much, on the other had there are several that are very liquid but more price varys more.

Currently have about 7% in preferred stocks (not index like pfd only individual stock).
Valuethinker
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Re: Preferred Stock

Post by Valuethinker »

elainet7 wrote: Fri Aug 23, 2019 1:52 pm these low rates and going lower will put us all in a tizzy
I gotta think rick ferri is quite knowledgeable
I have owned vanguard hi yield for a long time and read vanguard is best at buying up the highest rated junk bonds
As and when we hit the next bear market will demonstrate whether this is a good or bad idea.

FWIW no sign of interest rate rises any time soon.

Just don't count these things as (purely) bonds. They are called Preference *shares* or stock for a reason
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