how to invest in preferred stock
investors can trade for preferred stock just like common stock however because of how they differ from common stock investors need a different approach when investing in them researching the issuing company is essential investing in preferred stock from a shaky company is as risky as buying its common stock if the company fares poorly both types of stock are likely to produce losses one key thing to consider when choosing preferred stock is the dividend compare the dividends you ll receive relative to the share price to determine if the yield offers an attractive return a better yield can result in greater returns moreover take note of whether the stock is callable or convertible callable preferred stocks can be repurchased by the issuer at a preset date and price causing you to miss out on future dividends convertible preferred stock meanwhile can be converted into common stock at the company s discretion which can be an advantage if the price of the common stock rises significantly 