This paper examines the case for investing in preferred stocks. We begin by providing background information, and we then proceed to discuss the benefits and risks of investing in preferred stocks. Subsequently, we analyze the return behavior of preferred stocks, including the characteristics of expected return, volatility, and correlation with other asset classes. Finally, we address the issues institutional investors would face once the decision has been made to invest in preferred stocks. We conclude with a brief summary and a recommendation that a dedicated allocation to preferred stocks is not recommended for most institutional investors.