Common Stocks vs. Preferred Stocks: What's the Difference?

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When we enter the world of stocks, we'll encounter various types of stocks, with the most popular being common stock and preferred stock. Although preferred stock can be exchanged for common stock, the number of preferred shares issued by a single issuer is much smaller than common stock from the same company and is difficult to trade.

For beginners, the terms preferred stock and common stock can be confusing, and we all want to know the difference and which stock is more profitable.