Info!! Preferred Stocks: Anything Exactly Dull

this 2002 article from Forbes titled "Dull is Good: Preferred Stocks". As the charts for 2 preferred stock ETFs higher upwards depict, preferred stocks bring been anything merely irksome inwards recent weeks.

The argue for this, as Index Universe points out, is that the bulk of preferred shares are issued yesteryear companies inwards the fiscal sector. As the banks as well as other fiscal issues bring cratered as well as and hence bounced sharply higher, their preferred shares bring followed suit. The charts for PFF (PowerShares Financial Preferred Portfolio ETF; tiptop chart) as well as PGF (iShares S&P United States of America Preferred Stock Index Fund ETF; bottom chart) exhibit a considerable book spike inwards recent sessions, every bit investors bring questioned the viability of banks as well as worried nearly associated risks of default.

Among the tiptop holdings for PFF are preferred shares inwards Ford Motor, Citigroup, Countrywide, as well as J.P. Morgan Chase. Among tiptop holdings for PGF are preferred shares inwards Barclays, Citigroup, Credit Suisse, Merrill Lynch, as well as Wachovia. If investors idea those preferred dividends were secure, we'd come across a lot less volatility inwards those shares than inwards the mutual stock. When preferred shares autumn 25% inwards a affair of days, we're either seeing the buying chance of a lifetime or an efficient marketplace pricing inwards worse things to come for these companies.
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