Equity returns can vary dramatically from year to year, and different types of equities involve different levels of risk. Unless you are speculating, you should buy for the long term so you can ride out any temporary market downturns. And equities should be considered as components in a diversified portfolio containing income-generating assets as well. Preferred shares provide a predictable stream of income through dividend payments which are typically paid quarterly. However, the dividend payment can be increased, decreased, or even canceled by the company.
Preferred shareholders rank ahead of common shareholders if the company goes under.
Some growth funds may also hold commodities and precious metals and even real estate. As their name indicates, the goal of these funds is to make your money grow by achieving capital gains on their investments. We welcome your feedback. All rights reserved.