Previously, we touched upon share classes and the variety of rights towards owning sperate classes of a company’s shares.
However, these all still represent types of common shares.
To delve into the matter a little more complexly, we’re going to discuss your investment options in terms of preferred shares, also known as preference shares.
Like common shares, preferred shares represent ownership units in a specific company. The difference is that preferred shares have a preset dividend that is issued out and is to be paid out at set intervals over time.
A company must approve common stock dividends and they are not always guaranteed. Because these are based on the company’s performance, however, these dividends may or may not always occur. There will generally be a deferment of some kind if the company simply cannot afford to pay out the preferred share dividends.
Preferred shares are generally seen less like an equity and more often like a bond, and they generally don’t come attached with voting rights. Many issuers will allow for some wiggle room in your investment, maintaining a structure that lets shareholders convert preferred shares into common shares.
Preferred shares often look more attractive than common shares because they have higher status in the event of bankruptcy, and they come with a set payout.
But if a company happens to perform better than was initially anticipated, they can choose to pay out higher dividends. This, however, only applies to common shares.
Oftentimes, the buying and selling of preferred shares is done just the same as common shares, but while the dividend values stay the same, open market valuations can fluctuate.
“While some investors look at preferred shares as an investment with more reliability tied to it, they are nonetheless still shares, and the performance of the company is directly tied to their value”, explains Richard Meyer Cayne of Meyer International in Bangkok, Thailand. “You may decide you prefer common stocks instead, based on your investment strategies”.
Either way, it is always prudent to get sound advice from a trusted financial expert, particularly if you are unsure about which option to choose. Richard Cayne has been in the investment business for decades and he can help you decide which option is perfect for you.
Richard Meyer Cayne of Asia Wealth Group Holdings, the Meyer Group, Meyer Asset Management and Meyer International Ltd has been involved in wealth management planning for decades. Originally born in Montreal Quebec, Canada, he later relocated to Tokyo, Japan for over 15 years and now resides in Bangkok, Thailand. While he runs the Meyer Group and serves as the high credibility CEO of Asia Wealth Group Holdings Ltd, a London, UK Stock Exchange-listed Financial Holdings Company, as well as the Managing Director of the Meyer Group of Companies www.meyerjapan.com. and has additionally been the managing director of multiple organizations that specialize in helping high net worth individuals with succession planning .
Having worked with clients all over the globe with everything from portfolios to bonds to mutual funds to offshore investing to investing in retirement for your golden years, Richard Cayne of Meyer International can help you invest the right way and protect your cash. Richard has been a financial advisor involved in wealth management planning solutions and asset management in Asia for over 25 years and while living in Tokyo, Japan, he assisted many high net-worth Japanese families create innovative international tax and wealth management planning solutions. The financial holding public company of which he is CEO can be seen at Asia Wealth Group Holdings Ltd or the stock exchange link:
Asia Wealth Group Holdings Ltd – Richard Cayne Thailand. Meyer Asset Management Ltd has been in the wealth management space since March 2000 and uses fundamental analysis along with modern portfolio theory.
His image worldwide as a professional advisor has been sterling and he maintains a firm command and understanding of all things finance-related.