Apple Inc. (AAPL): Preferred Stock: A Smarter Investment Alternative?

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If you don’t want to focus in on a single security, iShares S&P US Preferred and other ETFs focusing on preferred stock offer broad diversification. Be careful, though, as ETFs tend to reflect the concentration of preferred shares issued by companies in the financial industry, so they may not be as diversified as you’d think.

Preferred stock isn’t the perfect investment for everyone, but the creative ways that companies are using it opens up some lucrative opportunities for investors. When a company you’re interested in offers a preferred stock issue, look at its characteristics and see whether it might be a better fit for you.

The article Preferred Stock: A Smarter Investment Alternative? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger owns shares of Apple and warrants on AIG. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends AIG and Apple. The Motley Fool owns shares of AIG, Annaly Capital, Apple, and Citigroup, and has options positions on AIG.

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