There are a wide range of strategies and securities available for advisors to manage the risk/return potential of their portfolios, but perhaps the least understood are preferred stocks and convertible bonds.
A convertible bond is a fixed income security that work just like regular corporate bonds but can be converted into common shares of the issuer’s stock. The bond pays interest per its coupon rate, providing guaranteed income until it is converted by the investor, at which point it behaves just as an equity stock would.
These type of hybrid securities offer investors the benefits of both stocks and bonds in […]
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