Video: How to Invest in Preferred Stock

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Preferred stocks are investments that act more like a bond and pay a higher interest rate. Understand the advantages of preferred stock and their higher dividends with insight from an experienced financial specialist in this free video on investing.

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Video Transcript

My name is Phillip Beningoso. I'm an investment professional. And I'm going to be discussing how to invest in preferred stock. Preferred stock are one of the many investment vehicles available to investor. Like common stock they represent ownership, but that is if they are convertible preferred stock. That way you can convert the preferred stock into ownership like common stock. Yet preferred stock act much more like a bond. They pay higher interest, and again preferred stock can be riskier than a bond and can be less risky than a bond depending on how it is issued and what type of preferred stock you're looking at. Let me quickly go through a couple of steps here that can make this process simpler for you. Step one, learn what the differences are between preferred stock and common stock. This can help you in your research about preferred. Two, understand the advantages when you buy preferred stock because preferred stock normally has higher and more regular dividends. Three, be aware of the disadvantages of preferred stock. While preferred stock carries less risk than common, it has more risk than a bond. The majority of the time. And may not offer a better income return. Four, open a brokerage account. You need that type of an account to be able to purchase any type of an investment vehicle such as preferred. And five, research companies. The most important is to research the type of preferred. Many very strong companies with very strong balance sheets and income statements, they have lots of cash on hand and have the money to be able to pay for preferred stock, the interest that it bears in dividends. Any information provided here is for informational purposes only, it should not be considered an individualized recommendation or personalized investment advice. Any investments or strategies mentioned here may not be suitable for everyone. My name is Phillip Beningoso and I'm an investment professional.

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How to Invest in Preferred Stock

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