I have recently been writing about investment alternatives in preferred stocks, choosing the right preferred and the benefits of preferred stock. I continue to increase my exposure to the asset class due to two primary reasons:
- My outlook for the upside in the broader equity market is lower than the yield I am obtaining in preferred stocks. In addition, I believe that there is greater downside in common stocks than there is in preferred stocks. This outlook supports the investment in preferred as it creates higher returns, greater cash flow, and downside protection.
- I believe