How to Buy Individual Bonds: A Fixed-Income Toolkit
by Stan Richelson and Hildy Richelson
Once you’ve learned about bond basics and reviewed the vast number of bond choices, you’re ready to make decisions on how to invest your funds in bonds. Basically, you have two choices: You can purchase individual bonds, or buy them packaged together as funds. Both choices offer certain advantages.
The most compelling reason to buy individual bonds is that bonds come due at a defined time. Unlike bond mutual funds of any kind, individual bonds pay their face value in cash at maturity.
In this article
- Buying On-Line
- Pricing Information
- Real-Time Prices
- Choosing a Broker
- The Right Brokerage Firm
- Evaluating Bond Prices
- New-Issue Order and Confirmation Details
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Need a large chunk of cash for a tuition payment on the 15th of December 10 years from now? Buy a bond that matures on December 1, 2017.
Planning to retire? Buy a continuing series of bonds that come due when needed. The list is almost endless.
When you purchase individual bonds, you get to select the specific characteristics of the bonds that you wish to own.
To read more, please become an AAII Registered User or CLICK HERE.
Hildy Richelson is president of Scarsdale Investment Group, a registered investment adviser based in Blue Bell, Pennsylvania, that specializes in fixed-income investments. Hildy and Stan Richelson are co-authors of several books on bonds, including “Bonds: The Unbeaten Path to Secure Investment Growth,” Second Edition (Bloomberg Press, 2011).
Discussion
Excellent presentation clarifying some arcane practices.
posted over 2 years ago by Leonard i from New York
Thorough and informative. This information
will help individual buyers avoid mishaps.
posted over 2 years ago by William from New Jersey
A good primer on the mechanical side of bond purchasing.
posted over 2 years ago by Russ from Illinois
