Interest rates have crept up noticeably with the 30-year- treasury bond yield jumping from 4.8% in the fall of 1998 to 6.2% as I write this. That's a huge change of +29%. While this is not good if you're looking for a mortgage, it's good for investors seeking higher rates from fixed income securities.
Below are some investment grade preferred shares that have current yields of 8% and more. Dividends are paid quarterly and these are excellent sources for current income. Additionally, there is an opportunity for profit if you purchase shares for less than $25 per share and then the shares are called by the issuer for $25. (All but one of the issues in the accompanying list were trading at less than $25 on August 10, 1999).
The preferred shares below work as follows: You purchase shares at the market price just as you would with common stock. Of course, the price will fluctuate and you can have a loss or profit if sold. For as long as you hold the shares, or until the shares are called, you continue to receive the fixed dividend rate. If called, the issuing company redeems your shares at $25 per share. (Some special call provisions may apply).
For additional information about constructing a fixed income portfolio to provide current income, please check off on the reply coupon.