Morningstar Investment Conference: Everything You Need To Know About Preferred Securities

Preferred stock has been around for more than 150 years. One study suggests that the first shares of preferred stock were issued in 1836 by internal improvement companies in Maryland. However, some investors might not have given this asset class much thought until the government commandeered preferred shareholders' dividends in the government-sponsored enterprises Fannie Mae and Freddie Mac. Preferred shareholders sued, and the saga has been going on for years.

But Fannie Mae and Freddie Mac aside, preferred shares can offer significant benefits for investors. At the Morningstar Investment Conference on Monday, Doug Baker, portfolio manager and head of the preferred securities sector team at Nuveen Securities, outlined the opportunities and shared his guidelines for investing in...