Lastly, the Fed's explicit guidance for 0% rates into 2013 has created a mad scramble for yield. Nearly half of the new 52-week highs on the NYSE are preferred-stock shares, including Public Storage preferred (PSA-PE), Gabelli Dividend & Income Trust preferred (GDV-PA) and Alabama Power preferred (ALP-PLN).
Although there are three suitable ETFs for an aggregate ETF for the preferred-shares space, the same dilemma that existed in 2008 exists in 2011: Roughly 75% of all preferred shares come from the financial company arena.
Personally, I see J.P. Morgan Chase preferred shares as golden. Yet Merrill Lynch? With Bank of America receiving (requiring?) capital from Warren Buffett? And German bank exposure to European sovereign debt doesn't make me fawn over Deutsche Bank.In essence, with so much exposure to financial companies, you may not want to put up with the volatility of a preferred-stock ETF at this time. Individual preferred issues that yield hunters may like include utilities like Constellation Energy (CEG-PA) and DTE Energy (DTE-PA). You can listen to the ETF Expert Radio Show "LIVE", via podcast or on your iPod. You can follow me on Twitter @ETFexpert.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV