"Preferred stock has been much in the news over the past 18 months, primarily as the favorite way for cash-strapped banks to raise new capital," explains Mark Salzinger.

In The Investor's ETF Report, he says, "These unusual securities are popular because they offer high yields and have a higher position in corporate credit structure than common stock." Here, he offers a pair of favored ETFs that invest in preferred shares.

"We caution that preferred stocks also have significant drawbacks that dampen their appeal. Apreferred stock is really more like a fixed-income instrument than an equity security.

Continue reading A preference for yield: Investng in preferreds

A preference for yield: Investng in preferreds originally appeared on BloggingStocks on Fri, 31 Jul 2009 11:00:00 EST. Please see our terms for use of feeds.