Usually preferred stocks are reserved for people in the company like the board of directors. They pay a higher dividend and give you more of a voting right in the company. The only drawback is they are either really expensive or only company issued and cannot be sold on the general market.
Preferred stock is preferred as to dividends. It is another means of raising capital for a corporation. Banks typically use them and will pay 5-6% per year on each share. They typically are issued at $25 a share.
Those who buy them are looking for dividend income and are usually higher income individuals. Preferred stock does not carry voting rights and are actually more like bonds than stocks.
The preferred dividend is a higher preference than common stock dividend. So if a company can't pay both its preferred and common stock dividend only the preferred shareholders get paid.
You should always look for fundamentally good and strong stocks. You should go for bluechip stocks and stay in for long term to get more profit from the stock market
What type of people invest in this stock & why? Also, what are some advantages & disadvantages of preferred stock?
