Common Stocks vs Preferred Stocks | Similarities and Differences

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Күн бұрын

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Common Stocks vs Preferred Stocks | Similarities and Differences
In this video, we're going to explain the differences between common stocks and preferred stocks.
While they're both stocks in companies and entitle the investors to a claim on profits and assets, common shareholders have a higher return and risk potential than preferred shareholders. That's because common shareholders are subject to greater stock price movements and because preferred shareholders have a higher claim than the common shareholders.
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Пікірлер: 107

@Elizabeth-mh2dj 15 күн бұрын

Every week I buy more of whatever is the lowest percentage of my portfolio and try to keep everything around 10%. Please what could be my safest buys with $400k to outperform the market in 2024?

@MablePauls 15 күн бұрын

I'd avoid the index funds, mutual funds, or specific stocks for the time being. The 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows sign of recovery.

@Cinthia-gk3ip 15 күн бұрын

This is why I entrusted a fiduciary with my investmnt decisions. Many underestimate advisors until emotions lead to losses. My advisor crafted a tailored strategy aligning with my long-term goals, guiding entry and exit points for the equities I focus on. This has grown my portfolio to over $850k. My personal best so far

@Stephine-un5zs 15 күн бұрын

How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.

@Cinthia-gk3ip 15 күн бұрын

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@Stephine-un5zs 15 күн бұрын

Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.

@patelvidhu4840 5 жыл бұрын

Return on capital is not guaranteed in common stock. Return is guaranteed in preferred stock at fixed rate. Growth potential is high in common stock. Growth potential is low in preferred stocks.

@Lumovest 5 жыл бұрын

Spot on!

@honggwan. 2 жыл бұрын

Thank you for the video! It helped me to understand the difference between the common stock and the preferred stock! Pressed the like button.

@4Zs4Ever 3 жыл бұрын

Thank you. This is the information I was looking for. Much appreciated 🙂

@SandalinaEvi Жыл бұрын

Excellent video. Thank you so much. Would definitely prefer common stocks because of upside potential. You can always sell stocks when stock market is rumbling and shares go on a downward slide. And from all what my experience is: in the event of an insolvency bonds have preferred status over preferred stocks when it comes to claims on company's assets. So in case bond holders are paid there will not be much left for preferred stock holders.

@jonalyn632 5 жыл бұрын

Thank you so much for making this video. As a beginner in stock market this video helped me a lot. As assured with other beginners like me. Thank you! 😊

@jonalyn632 5 жыл бұрын

@@Lumovest I"ll wait and support your upcoming videos! Thanks for sharing!

@DanielChar 2 жыл бұрын

Thank you for the super clear and no fluff explanation

@alessandrolagi2147 3 жыл бұрын

love the video! thanks, I was preatty confused after professor's lesson

@Lumovest 3 жыл бұрын

Thanks man!

@sabrinaalam6055 2 жыл бұрын

This video is such a gem. Thank you very much.

@tejassawant6790 5 жыл бұрын

Great explanation!!!

@jaystew7045 4 жыл бұрын

Thanks for the breakdown. I literally read a article about a certain company earlier this morning and i bought $500 worth of their preferred stock. I honestly didnt even know what it was. I just had a random amount of money to play with so i said "fuck it." I usually only buy common stocks but now, ima set my portfolio up to where 10% of it is preferred stocks

@sunshineanderson6349 2 жыл бұрын

Good luck my friend. How’s it going for you?

@AvneetAhuja 2 жыл бұрын

Hopefully you did not go for an all stock portfolio, add some bond investments in portfolio please really helps in the long run to diversify, I'd suggest a 40-60 split between bonds and stocks

@yang1021007 2 жыл бұрын

thank you , very concise and clear . right now at this point in my life I'm more of a common stock holder , at the same time I hope to one day have enough I can live on dividends alone or the the interest and never touch the principle

@MrBlackstonia 4 жыл бұрын

Thanks a lot. I didn't know the difference until now... and I think it's an important one...

@ejandreoni Жыл бұрын

Great job! This was an excellent explanation. 😊

@JueAmni 3 жыл бұрын

Thank you! This helps me alot

@user-eh2pq5dc6w 8 ай бұрын

Thank you for the video!

@hyojinlee Жыл бұрын

Thank you for this video!

@carlosrivero9943 3 жыл бұрын

Very helpful! Thanks!

@vimbayimatunga4101 2 жыл бұрын

Thank you so much🔥because of this video the confusion was cleared and I will pass my exam today

@khutjomangope141 4 жыл бұрын

This was very helpful, thanks

@mscarmnescence 3 ай бұрын

Thank you so much ❤

@francisamalraj9646 4 жыл бұрын

Excellent info. Thank you

@user-ig2zn9ex2u 11 ай бұрын

Really illustrating!

@_Greens_ 3 жыл бұрын

Well explained! Thank you 😊

@Lumovest 3 жыл бұрын

Thanks for watching!

@eajaz2982 3 жыл бұрын

By watching your video I really like it you really showed a wonderful charts and all

@Melki 3 жыл бұрын

Thank you :). Some employees might want to buy assets for the company, in this case I think they would get preferred stocks. But, is there an arrangement where the value of the stocks depreciate in align with the said asset?

@arvinnaidu1888 3 жыл бұрын

Thank you !

@centralintelligenceagency9082 Жыл бұрын

AWESOME VIDEO !

@rachnacauttuck4398 2 жыл бұрын

thank you for this important video

@shiftstart 4 жыл бұрын

Not all preferred stocks are publicly traded. And Preferred stocks dividends can be paid out of operating income not net income.

@anoopkfrancis3977 2 жыл бұрын

Helpful video 👏

@brandyyellow 4 жыл бұрын

excellent thanks

@sharmaineflores5823 3 жыл бұрын

Thank You 🧡🧡🧡🧡

@evilzzzability 2 жыл бұрын

The callability of most preferred stock issued must also be understood, as this is another type of risk to take into account with this type of security.

@sterlingphoenix71 3 жыл бұрын

Do preferred stocks also comes in classes? Are some class A stocks similar to preferred stocks if designed?

@saranroy 4 жыл бұрын

Thanks.

@adultman Жыл бұрын

definitely on preferred cause no matter what the company gains they must go through the preffered shareholder first and that locks in a stable connection of profit going from the company to the shareholder itself so for me its better stable than nothing!

@HkHari 4 жыл бұрын

With love from INDIA . Your videos are helpful

@Lumovest 4 жыл бұрын

Thanks so much!

@asphaltandtacos 2 жыл бұрын

I find it interesting that Ford Motor Company does not pay dividends with its common shares and that its preferred shares are higher. Ticker Symbol is F for the common shares.

@tommycee8319 4 жыл бұрын

What is the reason for allowing/ not allowing voting ?

@barrylombu 3 жыл бұрын

Great explanation! But how we can buy the preferred stock? Because its sold in the same place with common stock

@asphaltandtacos 2 жыл бұрын

Check with your brokerage firm. There might be a button to click on that will list the preferred shares for any given company. The commission structure should be the same for both common and preferred shares. In other words, should common shares be commission free so will the be preferred shares. Keep in mind that broker assisted trades will result in commission fees which will vary by firm.

@slimj82 Жыл бұрын

Can preferred stocks be shorted or have synthetic shares?

@zemedkunmersha2103 2 жыл бұрын

good lecture

@JackAgainski 3 жыл бұрын

Preferred stocks are good for retired people who don't want risk. You can also buy ETF's that hold preferred stocks, like SPHD, PGX, etc.

@riteshvs4949 10 ай бұрын

What is the main difference

@ginab6142 7 күн бұрын

Can someone point me in the right direction? I am trying to help the little old lady who lives next door - - her husband had Common Stock Certificates for TWA. How/where do I find out if there is any value left? I thought maybe they were converted to American Airlines stock (I don't think so because she has the actual stock certificates) OR they were turned over to unclaimed money because they were never converted (I've searched the unclaimed money site & don't find her husband's name) - so I don't know where to search next. They certificates were in an envelope sent by American Stock Transfer & Trust Company which is now EQ - - but they have not been helpful at all. Just trying to help my sweet neighbor find/recover any value in accounts that her husband had.

@kimthoa7901 2 жыл бұрын

The video sound is pretty good, beyond my imagination

@hirotips9674 3 жыл бұрын

How would I know if the share I am buying in the market is a common stock or a preferred stock?

@Lumovest 3 жыл бұрын

Unless the name of a stock say otherwise, it's a common stock.

@AvtarDhillon 2 жыл бұрын

Nice video

@shawnfrank5303 4 жыл бұрын

How do you find preferred stocks though ? I don't really see them on common broker apps for instance.

@giancarlochuate3455 3 жыл бұрын

web.facebook.com/BDA.AILCGIAN

@andrewlingyan8828 3 жыл бұрын

Most newbies fail simply because they don't understand how the market works in general or in particular how the market relates to stock or currency pair they entering. If a retail trades doesn't grasp what the market makers are doing and when they are doing it, the greatest strategy in the world will fall. For new traders the markets are like entering an F1 race before you've passed your drivers license test. I am a beginner I never believe I made $30,000 in just a week from trading and with the market. an expert financial analysis and he made me-learn to read and understand the language of price action. He guides me with the exact time frame to trade and now I just received my first withdrawals of $30k in my bank account today I'm very happy, my advice is for you to contact him he will guide you perfectly well, and thank me later, I guess this is a good way to show my heartfelt appreciation for literally breaking the chain of my financial debit when I needed it most, you can contact him on his email (elvishercules48@gmail.com)

@mikhailbogen8637 3 жыл бұрын

Hello and thanks for sharing your knowledge. The picture remains unclear for me in a couple of aspects about preferred stocks. Firstly, I don't understand why a company may decide to issue the preferred stock. Why it may be profitable for a company (or for its common shareholders which is the same)? Which problem does a company solve by issuing the prefs and why may solving those problems (which ones exactly?) be less easy by not issuing them and applying some different ways (which ones exactly)? Secondly, it's unclear to me why the dividend privilege and the limitations in voting rights go together. Why is the preferred stock designed exactly this way?

@AvtarDhillon 2 жыл бұрын

Pref stocks don’t give away equity

@RealEstateRadioTV-SA 5 жыл бұрын

Great Tutorial Regards Gaven Malope South Africa / Sandton

@sterlingphoenix71 3 жыл бұрын

How do you get to invest in preferred stocks?

@philipraystevenkurt32gmail39 3 жыл бұрын

Most newbies fail simply because they don't understand how the market works in general or in particular how the market relates to stock/forex or currency pair they entering. If a retail trades doesn't grasp what the market makers are doing and when they are doing it, the greatest strategy in the world will fall. For new traders the markets are like entering an F1 race before you've passed your drivers license test. One more advantage is the possibility to benefit from repetition. Without this type of strategy, you probably won't know what worked or why it worked and even if you did, it would be hard to repeat therefore for you need a perfect mentor to teach you perfectly to enable you invest and trade accurately on your own, which i highly recommend you Mr Hercules He guides me with the exact time frame to trade and now I just received my first withdrawals of $30k in my bank account today I'm very happy, my advice is for you to contact him he will guide you perfectly well, and thank me later, I guess this is a good way to show my heartfelt appreciation for literally breaking the chain of my financial debit when I needed it most, you can contact him on his email 📧 📧 (elvishercules48@gmail.com)

@lulululu5138 3 жыл бұрын

Can we say stock is also capital??and why

@tahananinayt4917 3 жыл бұрын

Is it possible for an individual to have both common and preferred stock?

@Lumovest 3 жыл бұрын

Yes!

@tahananinayt4917 3 жыл бұрын

Thank you😊

@ahmedalkhalifah6973 5 жыл бұрын

come oooon common stock

@patilpranava 5 жыл бұрын

I would prefer both stocks in 50 50 and anualy rebalance it.

@abramriccardo9251 4 жыл бұрын

i think so, but there must be a way(some kind of method) to make the proportion more efficient, it doesn't have always 50;50, I wanna know some commonly used method to balance this based on risk profile

@cryptokhan989 3 жыл бұрын

Why can companies only pay 2 - 6% in dividends? I tried to look up some information on this but couldn't find any. I get that they can't obviously pay a ridiculous percentage of their earnings but where does the 2-6% come from?

@antoniokokic7488 Жыл бұрын

It‘s an average span. There are companies that pay less, and those that pay more. But if a company pays less than the average, it‘s not very attractive. And of it pays more, there‘s usually a catch. High yields are usually a sign of high risk, meaning the company might be going through a crisis and needs to attract investors as soon as possible.

@lorikpajaziti499 Жыл бұрын

it seems the preferred stock is more like a bond rather than stock

@thane816 Жыл бұрын

I love it when people who own only 3 shares raise hell at the stockholders meetings.🤣

@wavemakingoflife 4 жыл бұрын

From a pragmatic point of view preferred stocks are the ideal choice, however if you're looking at it through an idealistic and capital hungry lens rather than a practical monocle then common stocks would be your optimal choice.

@asmiitaa5876 3 жыл бұрын

is stock and equity same?

@Lumovest 3 жыл бұрын

Yes!

@tahananinayt4917 3 жыл бұрын

I’m sorry for being si dumb about this but, what is corporate voting?

@Lumovest 3 жыл бұрын

Only smart people ask questions. Voting is where holders of the stocks vote on key issues. As holders of a company's stocks, you are one of the owners of the company. And as owner of the company you have a say in the company's key policies. So every year, the company puts these key policies up for vote by the shareholders (you).

@tahananinayt4917 3 жыл бұрын

Ow I get it now, thank you for answering, btw your vid really helps me.

@tahananinayt4917 3 жыл бұрын

I’m gonna take up a course in college with a connection to finance, and I’m curious about how critical and dynamic working in the said field🤔

@jessamaerolluqui2216 5 жыл бұрын

Common stock for sure.

@azhanali1448 4 жыл бұрын

Preferred Stock for me. I will be a pensioner soon. I dont want to take high risk. Enough return to counter inflation is sufficient. As long as I can buy doughnut & coffe, I'm okay.

@a.l.3353 14 күн бұрын

Could Preferred Stock price crash? Is it tied to the stock market condition? If the stock market crashes, will Preferred Stocks crashes too?:

@Lumovest 11 күн бұрын

It's certainly possible, but less likely than common stocks because there's a stable dividend stream and higher priority claim to the company's assets than common stocks.