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.

Share this article

About the author

Stan Richelson heads (with Hildy Richelson) Scarsdale Investment Group, a registered investment adviser based in Blue Bell, Pennsylvania, that specializes in fixed-income investments. The Richelsons are co-authors of several books on bonds, including “Bonds: The Unbeaten Path to Secure Investment Growth,” Second Edition (John Wiley & Sons, 2011).
• Stan Richelson Profile
• All Articles by Stan Richelson

Hildy Richelson heads (with Stan Richelson) Scarsdale Investment Group, a registered investment adviser based in Blue Bell, Pennsylvania, that specializes in fixed-income investments. The Richelsons are co-authors of several books on bonds, including “Bonds: The Unbeaten Path to Secure Investment Growth,” Second Edition (John Wiley & Sons, 2011).
• Hildy Richelson Profile
• All Articles by Hildy Richelson

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.

→ Stan Richelson heads (with Hildy Richelson) Scarsdale Investment Group, a registered investment adviser based in Blue Bell, Pennsylvania, that specializes in fixed-income investments. The Richelsons are co-authors of several books on bonds, including “Bonds: The Unbeaten Path to Secure Investment Growth,” Second Edition (John Wiley & Sons, 2011).
Hildy Richelson heads (with Stan Richelson) Scarsdale Investment Group, a registered investment adviser based in Blue Bell, Pennsylvania, that specializes in fixed-income investments. The Richelsons are co-authors of several books on bonds, including “Bonds: The Unbeaten Path to Secure Investment Growth,” Second Edition (John Wiley & Sons, 2011).

Discussion

Excellent presentation clarifying some arcane practices.

posted about 1 year ago by Leonard i from New York

Thorough and informative. This information will help individual buyers avoid mishaps.

posted about 1 year ago by William from New Jersey

Good information for those new to bonds.

posted about 1 year ago by Joseph from Kansas

A good primer on the mechanical side of bond purchasing.

posted about 1 year ago by Russ from Illinois

February 2008 Issue

Stock Screens
Investing in Proven Growth Using CAN SLIM Revised
William O’Neil’s original CAN SLIM approach was based on analyzing the biggest stock market winners from 1953 to 1993. But the analysis was extended to 2001 and the criteria revised. A look at how our screen based on this revised approach has fared.

AAII Model Portfolios
Sub-Par Performance by Market in Pre-Election Year Drama
The Model Mutual Fund Portfolio did considerably better than the S&P 500 last year, coming in at 10.2%, but with disparity within the portfolio. Its superior performance was due to one fund.

Special Features
2008 Discount Broker Guide
AAII's annual survey can help you find the right broker. This year's survey covers 52 firms that refer to themselves as discount, 45 of which offer on-line trading.

Bonds
How to Buy Individual Bonds: A Fixed-Income Toolkit
Once you make the choice to invest in individual bonds, the question is: How do you buy them? Guidelines for evaluating Web sites and locating a bond broker.

Investor Professor
Extreme Anxiety: Evaluating Current Market Levels
It is easy to be swept up in deep market swings. But markets rarely stay at historical extremes. The big question is: What is "normal"? One practical approach is to examine relative fundamental values over time.

The First Cut
The First Cut: Navellier's Growth Stock Winners
A starting point for investors. This issue's focus is on stocks that meet Louis Navellier's eight tried-and-true fundamental factors.

Offbeat Offerings
Offbeat Offerings: Investing in Gold
An investor reference for products that are not your typical offering. This issue's focus is on gold investing.

Departments
Briefly Noted
Current news items of interest to individual investors.

Departments
Letters to the Editor
Member questions and comments on recent AAII Journal articles.

Departments
Briefly Noted

Briefly Noted

Letters
Member questions and comments on recent AAII Journal articles.

undefined