what is the downside of preferred stock 
though preferred stock often have greater rights and claims to dividends this type of investment often does not appreciate in value as much as common stock in addition preferred stockholders have little to no say in the operations of the company as they often forgo voting capabilities the bottom lineinvestors interested in generating cash flow from their equity holdings may be better suited holding preferred equity or preferred stock this type of equity investment represents ownership of a company and results in prioritized treatment for dividend distributions though there are sacrifices for this right preferred stock are simply a different vehicle for owning part of a business 