The Globe and Mail reports in its Thursday edition preferred shares, supposedly low-risk widow-and-orphan stocks, are in a bear market that looks much worse than what the broader market has been through. The Globe's Rob Carrick writes the S&P/TSX composite index was down 11.3 per cent for the 12 months to Aug. 31, while the S&P/TSX preferred share index was down 19.5 per cent. The composite has made 15.5 per cent for the five years to Aug. 31, while the pref share index is down about 21 per cent. Preferred share defaults are not a problem, so investors have at least been getting the dividend payments they expect. Still, Mr. Carrick says the decline in share prices has to be alarming. He figures what is happening appears more like a reassessment of the entire asset class in light of current conditions in financial markets. Interest rates are low and could yet fall if the economy continues to struggle. The rate-reset preferred shares that account for 60 per cent or so of the pref market were designed to reset every five years. He notes preferred shares were annihilated in the 2008-09 stock market crash, but stormed back quickly as the financial world settled down.