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Saturday, May 29, 2010

Are you getting a fair price for your bond?


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Individuals are piling into bonds, and some are buying individual bonds rather than ETFs or bond funds. I don't condone this because it is time consuming, difficult to diversify, and almost impossible to determine if bid or offer is fair . But if you have the time, the resources, and the knowledge and insist on buying individual bonds, it is worthwhile following the price of active bonds in the Wall Street Journal. This is a free resource.
Active bonds
Go to www.wsj.com...click "Markets"...click "Market Data"...click "Bonds. Rates, & Credit Markets"...scroll down and find on the right-hand-side "Corporate Bonds: Most Active" and click...scroll down and find the list of actively traded bonds.

You hopefully have noticed that we have navigated through a lot of useful bond market information.

4 comments:

  1. I stick with ETFs and no-load funds. I know my limitations in the bond space.

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  2. I actually do ETF bond funds as well too. I hate the risk involved for investing without diversification.

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  3. re: Shawn
    ETF bond funds are definitely the way to go. You can find funds that invest all along the yield curve as well as various credit quality niches.

    Some investors like to buy individual bonds because they feel they can ignore the market value and concentrate on cost since it will pay off at par.

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