Within a given compoany, preferred stock is a lower risk than common stock, as the preferred shreholder generally has a claim against future profits in the event a dividend is skipped, before any common stockholder. On the other hand, preferred stock dividends stay fixed, whereas common stock dividends are normally increased over the longer period of time. So, if on considers inflation as a risk, perhaps common stock actually wins out. The real question of risk comes down to the individual company, a more important decision element than the stock desigation. For instance, on its common stock, General Electric has paid a continual and increasing dividend, decade after decade. So, its common stock is far more secure, especially taking inflationary forces into account, than the preferreds of many less stable companies.
Stocks.
there are: Common stocks Preferred stocks 05/08/08 there are: Common stocks Preferred stocks 05/08/08 there are: Common stocks Preferred stocks 05/08/08
Preferred stocks and preferred are exactly the same thing. Preferred is just an abbreviation that is used so that people in the know can use their jargon.
Preferred stocks are special stocks with additional features or values, and are generally given priority over 'common' stock. Preferred stocks are frequently offered by banks and financial institutions such as Capital One and Goldman Sachs.
risky stocks would be citrix systems, sanmina, aplied micro systems, novell, and mosnter worldwide. as dictated as the 5 most risky stocks by Forbes
Preferred stocks are a much better investment because the return is much greater then that of other stocks. Although they are often long-term, the yield is often worth it!
Common stock is the major type of stock that is issued, it is different from preferred stock in that preferred stocks receive the first part of a dividend payment. Common stock receives what is left over after all of the preferred stocks have received their share, if anything. The benefit comes when there is a large dividend paid, many times (depending on the terms) preferred stocks have a limit to what they will pay per share, but the common stocks do not have a limit, and share equally what is paid out after the preferred stock, so there is a great opportunity for gain when times are good and large dividends are paid. The disadvantage comes when smaller dividends are paid, these stocks may receive only a little portion or even nothing from the dividend payment after the preferred stocks receive their shares. Common stock also come with voting rights to which preferred stocks may not entitle the owner.
In the financial world, more risk equals more return. Less risk equals less return. That is why you see Greece right now paying very high yields on their bonds (it is very risky to invest in a Greek bond right now because they could possibly default). If you buy a basket of 10 risky stocks, and then buy a basket of 10 low-risk stocks, the risky stocks will usually outperform the less risky stocks.
preferred stocks
Tech Stocks will be generally more volatile and thus considered more risky.
Common stock is the major type of stock that is issued, it is different from preferred stock in that preferred stocks receive the first part of a dividend payment. Common stock receives what is left over after all of the preferred stocks have received their share, if anything. The benefit comes when there is a large dividend paid, many times (depending on the terms) preferred stocks have a limit to what they will pay per share, but the common stocks do not have a limit, and share equally what is paid out after the preferred stock, so there is a great opportunity for gain when times are good and large dividends are paid. The disadvantage comes when smaller dividends are paid, these stocks may receive only a little portion or even nothing from the dividend payment after the preferred stocks receive their shares. Common stock also come with voting rights to which preferred stocks may not entitle the owner.
Preferred stocks are a type of equity security that typically provide shareholders with fixed dividends, which are paid before any dividends are distributed to common stockholders. They usually have a higher claim on assets than common stocks in the event of liquidation. However, preferred shareholders generally do not have voting rights in the company. Additionally, preferred stocks can be callable, meaning the issuing company can repurchase them at a predetermined price after a certain date.