When it comes to investing in stocks, the question that most often comes up is probably: “What is the difference between common shareholders and preferred shareholders?” I’ve heard this question a lot from friends who are just starting to invest, and honestly, it isn’t easy to explain clearly.

Let’s start with the basics first. **Common Stock** is what most people are familiar with. When you hold common shares, you are a real owner of the company. You have voting rights at shareholder meetings, and you have the potential to earn unlimited profits. If the company performs well and grows, the stock price could surge—10 times, 100 times, or even more. But the dark side is that if the company goes bankrupt, you’ll be last in line to receive any money back. It’s high risk, but the returns are unlimited.

As for **Preferred Stock**, it’s a bit unusual because it combines features of both bonds and common stock. Preferred shareholders receive fixed dividends before common shareholders, no matter what. And in the event the company goes bankrupt, they get repaid before common shareholders. That’s why it’s called “preferred.”

There are many differences between common shareholders and preferred shareholders. First is **voting rights**: common shares have them, but preferred shares don’t (or have them in very limited cases). Second is **dividends**: common shares’ dividends vary depending on profits, while preferred shares pay fixed dividends. Third is **risk**: common stock is higher risk but offers greater opportunities for growth, while preferred stock is lower risk but with limited returns.

I’ve seen real cases, too. For example, **KTB-P** (Krungthai Bank’s preferred stock) had severe liquidity problems. Some days, the trading volume was zero. People who had bought the shares but wanted to sell then had to sell at a discount or wait a long time. This is a risk that many people overlook: even if preferred stocks look safer, their low liquidity can make it impossible to sell when you need to.

Another thing to watch out for is **call risk**. Most preferred stocks come with conditions that allow the company to buy them back. If interest rates fall, the company often calls the shares back in order to issue new shares with lower interest rates—meaning you may miss out on getting better returns.

So which one should you choose? If you’re looking for growth and you’re willing to tolerate volatility, common stock is the option. If you want a steady cash flow and you’re afraid of losing your principal, preferred stock may be more suitable—but you must be careful about liquidity and all the terms and conditions.

The difference between common and preferred shareholders in terms of risk isn’t just about which one is safer. It’s about how well it matches your goals. There is no single “best” asset—there are only assets that are best suited to your situation.