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Are common stock shares better than preferred stock shares?

Common stock shares are more common, for lack of a better word. There are more of them floating around in the market, compared to preferred stock shares. If you want to sell your preferred shares, you may find it more difficult to liquidate them if you can’t find a ready buyer.

Should you invest in preferred stock shares?

Investing in preferred stock shares can yield several advantages. On the pro side, some of the best reasons to consider preferred stock include: Aside from these benefits, some preferred stock shares may also be convertible. This means you can convert them to shares of common stock.

What is the difference between a common share and a preferred share?

Ultimately, both common and preferred shares are paid out of a company’s earnings. The returns of a common share are most commonly based on the increase or decrease of the share price, including an optional dividend paid out. In contrast, the returns on a preferred share are mainly based on its mandatory dividends.

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