Investing in Bonds and Information


If you are looking to spread your investment over a variety of instruments, then you must ensure that bonds  form a part of your investment plan. To create a portfolio that matches your needs and expectations, over long term and short term period, you can choose from a wide variety of individual bonds. Individual bonds are traded in the OTC markets. Some bonds, especially corporate bonds are also traded on the New York Stock Exchange.

Bonds can be brought from the primary markets when they are first issued, or from the secondary markets, where they are already being traded. Bonds sold in the OTC  markets are usually sold in $ 5000 denominations. For bonds that are perceived as safe and performs outstandingly the face value is considered as equivalent to $ 100.

In the secondary markets, bond prices includes a mark up. This is because it includes, dealer’s costs and profit. For specific bonds that are not readily available and which needs to be tracked down, an additional commission is usually charged. Depending on the type of bond, transaction volumes and the type of service provided, each firm establishes its own prices. This price is of course, within the specific guidelines laid down by regulatory boards.

To understand and compare the prices of bonds there are are various sources. Historical price data of corporate and municipal bonds are available on various investor websites. A variety of criteria  such as yields, prices and ratings  are applied to determine the true worth of a bond.

There are Bond funds similar to stock funds which offer professional advice and expert management advice on how to create a bonds portfolio. It, of course comes at a price. The advantages of a Bond fund is that investors can spread their risk exposure over a wide range of options.

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