Sell in May, Then Buy Preferreds

The dreaded aphorism that we should bail on stocks in May and not return until November doesn’t sit well with this long-term diversified portfolio aficionado. Still, there are some folks out there who think it’s a good idea. Or maybe they’re just scared. And yet, that little voice inside tells them they should have some kind of exposure. After all, perhaps they need some fixed income. That’s why I think, if you’re going to sell some of your portfolio, redeploy that capital into preferred stocks.

First, let’s review what these securities are all about. Preferred stocks are often referred to as “stock-bond hybrids,” as they share characteristics of both types of vehicles. Here are some of the preferreds worth looking at: Ashford 9% Series E, HSBC 6.36% Series B, Public Storage 6.875% Series O, JPMorgan Chase 7% Series J and Duke Energy 6.4% Series K.

Source: InvestorPlace

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