Many income investors prefer not to take on too much market risk. Although dividend-paying stocks offer the potential for growth as well as regular income, they also come with the risk of total loss that comes with owning shares of common stock. That’s why some investors turn to preferred stock, which often has higher dividend yields and less exposure to the ups and downs of the stock market. Preferred stock has risks of its own, but in bear markets, it often outperforms common stock while maintaining an advantage on the dividend front.