Personal Finance

There's something to be said about following the "smart money's" lead into adventurous, high-potential growth plays. But billionaires also see plenty of potential in stable blue chips like the Dow Jones Industrial Average's components. Indeed, Dow stocks make up considerable portions of some high-profile managers' portfolios.

Billionaire investors often are viewed as more sophisticated, better informed and more likely to enter what would be considered more esoteric trades than the average investor. In some cases, those assumptions are true.

But there's something to be said about safety, as well as the ability of some well-known large-cap stocks to deliver surprisingly outsize returns. Big-time money managers know that - and have put their money where their brains are.

Investors of every ilk would be wise to take the hint and consider following that lead.

Here are seven Dow stocks that make up a large chunk of at least one billionaire investor's holdings. We'll examine how much they hold, as well as which qualities each billionaire investor likely appreciates most about their pick.

Read more: https://www.kiplinger.com/slideshow/investing/T052-S001-7-dow-stocks-that-billionaires-love/index.html

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Preferred stocks typically aren't first, second or even third to mind when investors think about what they want to include in their portfolios.

But if you're an income hunter and you don't already have these stocks on their radar, you might want to give them a look.

Preferred stocks are frequently referred to stock-bond "hybrids" because they contain elements of common stock (the type of stock you typically invest in) and bonds. For instance, like common stock, preferreds represent ownership in a company, and they typically trade on exchanges. However, like bonds, preferred stocks typically don't include any voting rights.

The primary feature of preferred stocks, however, are their dividends. Preferred stock dividends are actually closer to bond coupon payments in nature, in that they're typically set at a fixed amount. These dividends are high, too, often in the 5%-7% range. Just note that preferred stocks also tend to act more like bonds in that they trade around a par value. So they're a great source of fixed income, but they're not going to shoot considerably higher, like common stocks, as a company grows.

While you can easily purchase individual preferred stocks, exchange-traded funds (ETFs) allow you to reduce your risk by investing in baskets of preferreds. That helps to prevent any single preferred-stock disaster from undermining your portfolio.

With that in mind, here are three preferred stock ETFs to buy.

Read more: https://www.kiplinger.com/slideshow/investing/T022-S001-3-preferred-stock-etfs-for-high-stable-dividends/index.html