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Preferred Stocks and Preferred Income Funds Offer High Yields

A preferred stock trades like a stock but offers income like a bond. Preferreds are attractive because their yields are usually higher than corporate bonds of similar credit ratings. And preferred dividends are taxed at a lower rate than corporate bonds. Like bonds, preferred stocks usually trade in a narrow price range, but they can experience significant prices declines.

You can find information about specific preferred stocks at QuatumOnline, a free site. Or check with your broker.

In addition to individual preferred stocks, you can invest in convenient closed-end funds and exchange-traded fund that feature preferred stocks.

Here is a sample of 8 preferred income closed-end funds.

Preferred Income CEFs
Stock
Price Quote & Dividend
1-Year Price Chart
Dividend Chart*
BlackRock Credit Allocation Income Trust IV 
Flaherty & Crumrine Preferred Income Fund
Flaherty & Crumrine Preferred Income Opportunity Fund
John Hancock Preferred Income Fund
John Hancock Preferred Income Fund II
John Hancock Preferred Income Fund III
Nuveen Quality Preferred Income Fund 2
Nuveen Quality Preferred Income Fund 3
Click small charts (sparklines) to expand. * Uses 10 years or all years of dividends and prices, whichever is less.


To inspect the performance of the Preferred Income CEFs portfolio, see the returns table and chart below. Portfolio values are computed using weekly closes for stocks from Yahoo! Finance.

The 7 stocks included in the portfolio computations are: PFD, PFO, HPI, HPF, HPS, JPS and JHP. The current value of the portfolio assumes that $1,428.57 was invested (total of $10,000) in each stock at its closing weekly price for the current date in 2006. BTZ was excluded from the portfolio computations because of insufficient price data.


Preferred Income CEFs - Return Results
Portfolio:
Preferred Income CEFs
Start date:
><-bo-
Start value:
$8,571
End date:
Jul-24-2016
End value:
$10,809
Number prices
45
Minimum value occurred on Dec-31-1969
$8,492
Maximum value occurred on Dec-31-1969
$10,847
Total gain or loss (Start date to End date)
26.11%
Annualized gain or loss (Start date to End date)
9.41%
Total dollar value on End date of a $10,000 purchase made on Start date
$12,611
Average percent return for all possible buy/sell combinations
8.30%
Number returns
990
Number profitable returns (Winners)
891
Percent profitable returns
90.00%
Number unprofitable returns (Losers)
99
Percent unprofitable returns
10.00%
Winners to losers ratio
9.00
See Stock Return Calculator for return information for individual stocks or ETFs.


Click chart to enlarge it.



Customize your own Portfolio of Preferred Income CEFs using stocks from the above table. See returns for specified combinations of stocks for specified durations.


Related Article


Preferred/Convertible Bond Exchange-Traded Funds (ETFs)
Preferred Exchange-Traded Funds (ETFs)
Preferred Stocks Deliver High Yields