Are preferred stocks also at risk?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
There are normally traded stocks which rise and fall and benefit those who buy low and sell high. There are also preferred stocks which do not fluctuate at all and pay out at certain rates. My question is: Are the preferred stocks under the same kind of risk tradeable stocks are when Y2K hits or during a massive sell-off?
-- Feller (email@example.com), May 04, 1999
I think that preferred versus common stocks can be compared to a 1st or 2nd mortgage on your house. Preferred gets priority over common with regard to profits, distributions, etc. Less risky but still no guarantees of $ for $.
I will just hold off til next year....
-- Kristi (securx@Succeed.net), May 04, 1999.
The reason I ask this is I already have a substantial holding of preferreds in the 100k range
-- Feller (firstname.lastname@example.org), May 04, 1999.
I do not understand your terminology. You stated, "There are also preferred stocks which do not fluctuate at all and pay out at certain rates."
Certianly prefereds have a stated dividend, but the first part of your sentence makes it appear as if the trading price does not fluctuate at all. To me, this makes no sense as prefs have a market just like common stock. Anything that can be traded can have their price vary.
Perhaps what you have is something other than a typical prefered stock? Are you talking about a convertible prefered maybe? Or some oddball repurchase non-transferable thingie?
Not to be nosey, and don't tell me the quantity, but what is the stock name(s) you are refering to?
-- Ken Seger (KENSEGER@EARTHLINK.NET), May 06, 1999.