Not So Preferred, Preferred Stocks

Advertisements for preferred stocks may catch your attention with phrases like 5.5% return, conservative, safe and not to mention the word “preferred” in their title. However, these stocks tend to be quite the opposite. Turns out, their only real benefit is being second to last in the line of payout in the unlikely case of bankruptcy. This episode discusses how preferred stocks really work, and suggests other investment options that are actually preferred by the professionals.