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Kirk Chisholm

Wealth Manager, Series 65
Personal Finance, Retirement, Investing
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“Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group. His roles at IAG are Co-Chair of the Investment Committee and Head of the Traditional Investment Risk Management Group. His background and areas of focus are portfolio management and investment analysis in both the traditional and alternative investment markets.”
Firm:

Innovative Advisory Group

Job Title:

Principal

Biography:

Kirk has been providing wealth management services to individuals, executives, entrepreneurs, and their families, as well as businesses and organizations since 1999. He works with clients to advise them on financial planning, risk management, and portfolio management. He is also an expert at using a self-directed IRA or self-directed 401K to invest in alternative investments. He particularly specializes in alternative investments such as: real estate, precious metals (gold & silver), tax liens, horses, franchises, private company stock, start-ups, intellectual property and more. Kirk is dedicated to developing lasting relationships with all of his clients. 

Education:

BA, Economics, Trinity College

CRD Number:

4004975

All Articles
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April 2017
    Financial Planning, Real Estate
September 2016
    Real Estate
July 2016
    Personal Finance, Real Estate
January 2018
October 2016

All Answers
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    Stocks
Why do preferred stocks go down more than Dow Jones stocks?
100% of people found this answer helpful

We as human beings like to find reasons for everything that occurs. The lamp broke because someone knocked it over, a car crashed because the breaks failed. However, sometimes those reasons are too complex for us to understand. For example, why did the stock market go up today vs going down yesterday? News stories will give you reasons, but those reasons are not always accurate. The markets are overly complex, making the answers to these questions almost unanswerable. However, it makes us feel better that we have an answer to the question. I mention this because it is an important context for this question.

The real answer is that it will be different every day. Today it might be because of X and tomorrow it might be because of Y. In general Preferred stocks do not go down more than Dow Jones stocks, but sometimes they do. If you are asking about correlations, preferred stocks do correlate to equities, but not entirely. Correlation does not imply causation. If you are not familiar with this concept, you should consider it.

So, knowing that the reason will different each day, I'll give you a common reason for preferred stocks to drop unexpectedly with no obvious reason. One thing that is important to understand about preferred stocks is that they are not liquid (in general). Some preferred stocks may have an average daily volume of 5,000-20,000. If you are trying to buy or sell 50,000 shares, it will move the market. If the stock market is selling off, and someone needs liquidity and needs to sell shares of their preferred stock, it may unintentionally cause havoc with the stock price. It especially becomes apparent when the stock market gets rocky. The liquidity is one important component that most people ignore when they are investing in traded securities.

I hope you found this helpful

Cheers

Kirk

Innovative Advisory Group

January 2019
    IRAs, Real Estate
How do I set up a self directed IRA to invest in real estate?
100% of people found this answer helpful
January 2019
    Investing, ETFs, Mutual Funds
What is the difference between exchange traded funds (ETFs) and closed end funds?
64% of people found this answer helpful
August 2016
    Social Security
Is it better to start SS benefits at 62 or 66?
60% of people found this answer helpful
April 2016
    Investing, Asset Allocation, Stocks
Are high risk stocks still a good option for young investors?
59% of people found this answer helpful
March 2016