Most of the time investors purchase “common stock” as its the most common and provides basic partial ownership 🤔
But sometimes, investors prefer something else. . .
This other stock type is called preferred stock! 🥳
Unlike common stock, preferred stock guarantees payout first and fixed dividend rates 😮
But, what does that mean?
Sometimes a company can fail 😥
Receiving payout first means that if a company is able to return some money to investors, they’ll return money to preferred stock owners first 👀
A fixed dividend rate is a specific amount of money paid out quarterly and sometimes annually 💸
This amount doesn’t change at all, unlike normal dividends 🤔
So, if the company is doing poorly, you’ll still get the same dividend payout, but if the company is doing super well, you won’t get a greater dividend 🔍
Preferred stock owners therefore give up ownership 🤔
This is because preferred stock grants you safety over possible profits and also possible extreme risk 📝
So, where can you buy preferred stock? 💻
Preferred stock can be bought just like common stock!
You might even own some preferred stock without knowing it! WellsFargo and JPMorgan both offer preferred stock for example!
You can also invest in preferred stock through mutual funds or exchange-traded funds (ETFs) that focus on preferred stocks 🧺
Be sure to do your research since even preferred stocks can still go down!
Your investment is still tied to the stock’s price, even if your dividends are not 🦺
