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Preferred stocks - am I missing something?
Hi, I have done well buying preferred stock, especially banks stocks which payed huge dividends when the economy tanked. I am looking at buying some Bank of America preferred stocks and have a couple of questions.
The stock is selling for $25 right now, which should be the amount paid if the stock is called, right?
If $25 is the call price and right now it's paying over 7% it seems like a no brainer. If the stock price goes up then I am getting 7% on the money I invested and I am getting the capital gains. If the price goes down I can buy more and get more than 7% on my money.
What am I missing?
2 Answers
- ?Lv 68 years agoFavorite Answer
You are missing the BAC currently has 17 series of preferred stock outstanding. Before I try to answer your question by guessing which of these series you are talking about, maybe you could specify what security you are referring to.
- ?Lv 78 years ago
If it was a no brainer it wouldn't be paying 7%, would it. Otherwise you could beg borrow or steal at 4% and take the turn.
