Investors who want a decent return--but don't want to take on a lot of risk--have few choices. Many are turning to preferred stock, which comes in a handful of confusing varieties. There's convertible preferred, favored by investing legend Warren Buffett. Traditional preferred is bought mainly by insurance companies and pension-fund managers. But a relative newcomer, fully taxable preferred, is the best type of preferred stock to consider today, if a secure income stream is your goal.
That could change as early as next year. Lawmakers appear eager to reduce or eliminate the tax on dividends from common stock, and they may...
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