(MONEY Magazine) – Q. Although I thought I bought Enron bonds, I actually purchased 1,000 shares of Enron Capital LLC 8% Cumulative Preferred Stock. What are these, and how do I track the status of these shares now that the company has filed for bankruptcy under Chapter 11? ALAN KING INDIALANTIC, FLA.

A. You're certainly not the first person to confuse a preferred stock with a bond. Here's why: Unlike the more widely held common stock, preferred stock always offers dividends, and these are fixed, just as a bond's interest rate is set by the issuer. Preferred-stock dividends are usually considerably higher for each dollar invested than those offered by common shares.

The fact that your preferred stock is cumulative adds a slight twist--the term means that if by some miracle Enron should recover, you would be owed all the dividend payments that were not paid over the intervening years. As a preferred shareholder, you'd come before common-stock owners in the collection waiting line, but the creditors would come first.

"But even if Enron should ever recover, the debts are so staggeringly high that it is doubtful that shareholders will ever get any compensation," says Terry Dwyer of KDP Investments in Montpelier, Vt.

Enron's preferred stock is listed as ECTPQ, and at the time we went to press, these shares were officially trading over the counter (OTC) at about 5[cents]. (You can track your shares at www.pinksheets.com. For more strategies on stock that may become worthless, see the article on page 94.)

Q. Do you have any tips for buying corporate or municipal bonds on the secondary market? I've heard that inexperienced purchasers can be hit with unnecessary fees. ANN WATERS SALT LAKE CITY

A. Although you can find low prices for bonds on the secondary market, it's not always easy to know if you're getting the best price for the bond you want. Newly issued bonds, or those purchased on the primary market, are the same price for every buyer no matter where you shop, but the price of secondary issues can vary depending on the bank or brokerage firm.

Making an apples-to-apples comparison is exceedingly difficult, explains Steve Ackerman of Bear Stearns. You'll need to go to several broker-dealers to price bonds that share identical insurance ratings and call features, and come from the same issuer. "And what people don't realize," adds Ackerman, "is that the underlying credit rating of each issuer is subject to extraordinary variety and can be as significant, if not more important than, the bond's insurance rating." That's why it's smart to buy bonds through a reputable, experienced bond broker. You may want to forgo the challenge of buying individual bonds and opt for bond funds. Two good choices: Fremont Bond (800-548-4539) for corporate bonds and Vanguard Intermediate Tax Free (800-851-4999) for munis.

Q. I'm 66 and have a Keogh plan with one brokerage and a traditional IRA at another. Should I roll my Keogh into my IRA? JIM WOODBURY TRABUCO CANYON, CALIF.

A. A rollover would consolidate your accounts, cut fees and offer more estate-planning options. Depending on how your Keogh was set up, a rollover may also increase your investment choices. With both plans, you must begin taking minimum distributions at age 70 1/2, but an IRA can be passed along to beneficiaries other than a spouse without first getting his or her permission.