A strong retail sales report on September 11 pushed preferred stock prices lower for the second consecutive month. The implication was that if retail sales are picking up, inflation cannot be far behind so the Fed will surely be bumping up rates any time now. But when global oil prices fell during early October, speculators had the opposite reaction -- lower fuel costs drive prices down, which is sure to postpone any thoughts the Fed may have about raising rates.
Those reacting to such events are applying the short-term thinking of a value investor (buy low, sell high) to a long-term income investment (preferred stocks), which often creates buying opportunities for preferred stock investors who are paying attention...
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