Articles on preferred stocks, baby bonds, business development companies and covered-call ETFs. The library covers each asset class, strategy, tax treatment, the markets and the method behind the scores. Every article is free to read.
Three simple habits — spreading your holdings across different companies and industries, different call dates, and different types of securities — are what separate a well-built income portfolio from a lucky stack of high yields.
One clause in the prospectus decides whether a missed dividend must eventually be paid back to you or is simply lost for good — a detail that costs almost nothing in normal times but matters enormously when a company runs into trouble.
A $25 par value, a fixed dividend, and a claim ranking above common stock but below all debt define preferred stock, an instrument that pays like a bond and absorbs losses like equity.
Thirty days' notice is all most issuers owe before redeeming a security at par, and that option, held entirely by the other side of the transaction, shapes how every preferred and baby bond is priced.
Three yield figures accompany nearly every preferred and baby bond listing, and a premium-priced security can advertise a 6.7% current yield while delivering barely 4.8% to its call date.
Five dimensions — cash flow claims, asset priority, upside participation, maturity, and taxation — determine where common stock, preferred stock, and bonds each belong in a portfolio, and the familiar "hybrid" label captures none of them.