Canadian preferred shares education

James Hymas has published a considerable volume of information concerning fixed-reset preferred shares. It makes for very heavy reading (i.e. this is not something you can casually read at a Starbucks), but if you are in the right frame of mind, there is a ton of educational content that you would never see in your typical MBA program.

He also has an equivalent document for a class of preferred shares that stand a better chance of being redeemed early due to regulatory capital requirements rules which I will not repeat here.

While I’m on the topic of James Hymas, he is very concise with his analysis on the Canadian real estate market, mainly that it is caused by “low interest rates”, “an explosion of CMHC guarantees”, and “unsatisfactory stock market returns”. Capital has to go somewhere and if you can’t get a 4% return from the stock market, you can at least go for a cap rate for the same in the real estate market. I will observe that 5-year bond yields have slipped to the 1.00% level again and 5-year fixed rate mortgage are available for 2.39% on insured mortgages. Why bother to put up any equity when money is virtually being given to you at the rate of inflation?