Quick Take on Fixed Income – Effects of Lowering Credit Quality in Municipal Bond Portfolio
Q: Can you capture higher returns on a municipal portfolio by lowering its credit quality? A: Investors generally demand a higher yield when purchasing lower-credit-quality municipal bonds due to their greater risk. The assumption is the greater the risk, the...
Quick Take on Fixed Income – Characteristics of Preferred Stocks
Q: What are the characteristics of preferred stocks? A: Preferred stocks can be viewed as a hybrid of stocks and bonds. Preferred shareholders receive preference over common equity holders (hence the term “preferred”) for dividend payouts and in the event...
