SLCG Releases 'The Risks of Preferred Stock Portfolios'

Jun 02, 2010, 16:17 ET from Securities Litigation and Consulting Group, Inc.

WASHINGTON, June 2 /PRNewswire/ -- Securities Litigation and Consulting Group, Inc. ("SLCG") this morning released a research report entitled "The Risks of Preferred Stock Portfolios."  The report's primary authors are Ilan Guedj, Craig J. McCann, Edward O'Neal and Guohua Li.  Former professors, Dr. Guedj, Dr. McCann and Dr. O'Neal are Principals of SLCG and expert witnesses.  Dr. McCann and Dr. O'Neal are former SEC economists.  Dr. Li is a Senior Financial Economist at SLCG.

Dr. O'Neal explains that preferred stocks are similar to debt when the issuing company is financially healthy, and become more similar to equity when the company's financial condition deteriorates.  Dr. O'Neal summarizes the report as showing that issuers of preferred stocks are heavily concentrated in the financial services industry, a fact that exposes investors who hold a portfolio concentrated in preferred stocks to further risk - industry concentration risk and that preferred stocks expose investors to a lot of downside stock market risk.  "Preferred stocks provide the unfortunate combination of being bond-like when stocks are poised to payoff handsomely and being stock-like when the safety of bonds is most imperative."

The SLCG preferred stock paper and other working papers are available at

Securities Litigation and Consulting Group, Inc. ("SLCG") is a financial economics consulting firm based in the Virginia suburbs outside of Washington, DC. SLCG provides consulting services and expert witnesses to law firms, publicly-traded corporations, banks, brokerage firms and individuals involved in complex litigation throughout the United States. SLCG's staff includes PhD, MA and BA level professionals with academic, industry and government experience. Its experts have testified in state and federal court and in various arbitration forums.

For further information about SLCG or its research, please contact Dr. O'Neal at (336) 655-8718 or visit us at

SOURCE Securities Litigation and Consulting Group, Inc.