How To Trade

Preferred stocks have several advantages over common stocks. They are less risky because the issuer promises to return par value when the stock is called. They are often issued with a dividend higher than the common stock dividend so they serve the dual purpose of producing income while preserving capital. And the preferred stock dividend must be paid before any payment can be made on the common stock.

You have probably been aware of these characteristics, but you may not know there are substantial profits to be made by purchasing preferred stocks at a discount and selling them ata premium price.

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Preferred Stocks