Preferred stocks vs. paying off mortgage
BAC cumulative preferreds are yielding 8.5% to 9%.
USB cum pref's are yielding around 8.25%.
True, these aren't risk free. Not FDIC insured, junior position, dividends can be deferred for 5 years, volume is low, spreads are somewhat high (2%), etc.
If you have enough assets such that paying off your mortgage is a reasonable option, why wouldn't it be better to put the money into a diversified portfolio of preferreds like these instead of paying off the mortgage?
No wild swings of gains & losses like stocks, so no worry about having to liquidate at a loss for living expenses. Earn 8.5% in dividends and pay 6% on the morgage, making a net profit of 8.25% plus the possibility of a capital gain if it gets called at par.
Am I missing something?