Higher Returns from Safe Investments: Using Bonds, Stocks, and Options to Generate Lifetime Income

Chapter 9. Preferred Stocks—Obtain Higher Yields Than You Can with Corporate Bonds

There is a little-known corner of the stock market where you can garner above-average dividend yields, and maybe some tax advantage to boot: preferred stocks. Preferred stocks in solid companies are currently paying 6%–7% in dividend income—some 1%–2% per year more than the interest you could get from bonds in similar companies. Unfortunately, you don’t get this extra yield for free: Preferred stocks are not as safe as bonds. The events of 2008 serve as a warning that you have to be very careful about how you utilize these types of investments. This chapter shows you how.

Features of Preferred Stocks

Preferred stocks trade on stock exchanges the same as common ...