What are the preferred ones?

When it comes to improving cost effectiveness and to transform savings into money, there are many options. Depending on the amount of money, the profitability that you want to obtain and the risk that you intend to run To increase money, as well as time, banks can offer different products financial

Long-term deposits, pension plans and stocks on the stock market are just a few examples of common products that are usually within the reach of most savers.

However, alongside them, there are some specific financial products for expert investors and for BusinessThese products offer a much higher return, but also a much higher level of risk, and a real possibility of losing the entire investment.

Many of the great experts consider the participations preferred an excellent investment idea, if you have good knowledge on the behavior of these complex products.

What are preferred shares?

The preferred They are a type of participation that some companies issue, but do not have the same privileges as normal participations, who have preferred they do not participate in the capital of the company, nor do they have the right to vote to make decisions about the company.

Characteristics of preferred shares

• They do not confer rights on the holder.
• They have character perpetual.
• Its profitability is variable, although, during the first year a fixed profitability can be established.
• Profitability from the second year is marked by a market benchmark, such as the Euribor or the risk premium.
• In case of bankruptcy of the issuing company, the preferred shares will be the first shares to be settled.

The preferred ones in Economics

As long as a company maintains good sales figures, the shares or Actions Preferred are a good way to invest money, and to increase capital considerably. But if the company goes through a difficult moment, the preferred ones become, for all intents and purposes, shares, with the added defect that there is no right to vote on the company.

A good foundation on how the market investments, and a solid knowledge of economics can make preferred companies the best option for invest, however, due to the high risk of this type of investment, its sale is usually subordinated to certain rates from customers.