Most newbie investors think that stocks are the best — and sometimes, the only — choice for investment. Generally speaking, stocks are good investment options, but not all investors will find stocks appropriate for their risk profile or investment goals.
Differences of Preferred Stocks vs. Common Stocks vs. Bonds
For most people, bonds and equity (common stock) are the usual options for investment. We have already discussed these two asset classes lengthily. For a refresher course, here’s our primer on Stock Trading and Investing while here’s our tutorial on Bonds and Fixed Income.
List of Preferred Stocks traded in the PSE
Stocks may be “sexy” but your investment portfolio should never be composed of stocks alone. To understand why, read our article on The Importance of Diversification in Investing.
Aside from stocks, other investment assets that may be included in one’s portfolio include Bonds and other fixed income instruments; Pooled investment funds such Mutual Funds, Exchange Traded Funds or Unit Investment Trust Funds; Real Estate; Time Deposit Accounts; and Gold and other precious commodities, among others.
Another type of investment that can be added to one’s portfolio is Preferred Shares and this is what we will discuss in this post. Previously, we wrote a few introductory articles about Preferred Shares to help you understand this type of investment.