[quote=ucodegen]One thing to watch out for on dividend yielding preferred stocks. Their movement is similar to bonds on interest rate fluctuations. All yields tend to be priced relative to the zero-risk rate of return (generally considered the treasury yield). If interest/treasury rates go up, the face price (preferred stock price) will go down. What the dividends give, the stock price movement may take away.[/quote]
That makes sense. A lot of websites talk about them as hybrid investments that are part bond and part stock.
I wonder if it would make more sense to just invest purely in bonds and stocks and forgo preferred stocks completely.
