Recently, I was reviewing my portfolio and realized something that many new investors don't quite understand: not all stocks work the same way. Common and preferred shares are completely different, and choosing one or the other really depends on what you're looking for.

Let's see. When a company issues common shares, it gives you voting rights at the meetings. That means you have a say in important decisions like electing directors. In return, the dividends you receive depend on the company's performance, so in good years you earn more, but in crises, you might receive nothing. The growth potential is high, but so is the risk. They are ideal if you have a long-term horizon and can tolerate volatility.

Preferred shares work differently. You don't have voting rights, but in exchange, you get more stable dividends, usually fixed or with a pre-established rate. The interesting part is that if the company faces financial problems, you have priority to receive dividends before common shareholders. In case of bankruptcy, you also recover your investment earlier. It's like a middle ground between a bond and a stock.

To understand it better, think of this: common shares offer greater appreciation potential but with market volatility. You can gain a lot or lose quite a bit. Preferred shares, on the other hand, prioritize predictable income over explosive growth. Less excitement, more peace of mind.

There are interesting variants of preferred shares: some are cumulative (unpaid dividends accumulate), others are convertible (you can convert them into common shares under certain conditions), and redeemable (the company can buy them back). This provides flexibility depending on your strategy.

Now, which one to choose? It depends on your profile. If you're in the early stages of your financial life and can withstand volatility, common shares make more sense. You seek long-term growth and are willing to take risks. If you're close to retirement or simply prefer a steady, predictable income stream, preferred shares are your ally.

One thing I noticed recently: the S&P U.S. Preferred Stock Index fell 18.05% in five years, while the S&P 500 rose 57.60% in the same period. This perfectly illustrates the difference in behavior. Preferred shares move less but are more stable; common shares go up more but with greater volatility.

My personal recommendation is to diversify. Mix both according to your risk tolerance. If you have common shares but want to reduce volatility, add preferred shares. If you only have preferred shares but want more growth potential, some common shares can work.

To buy, the process is simple: choose a regulated broker, open an account, carefully analyze the company whose shares interest you, and execute your order. You can go at the current market price or set a limit price. Some also offer CFDs on these shares if you prefer not to hold them directly in your portfolio.

The key is to understand that common and preferred shares serve different purposes. It's not that one is better than the other, but each adapts to different objectives. Choose based on where you are in your financial life and what you need from your investment.