The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments


Subject:  Re: Bonds vs Bond Funds--Again Date:  12/30/2009  4:59 PM
Author:  MadCapitalist Number:  29612 of 36325

Bonds are not nearly as liquid as equities

Um, no the market is larger than equities. Some bonds are illiquid just as some stocks are.

Um, yes. I didn't say anything about the *size* of the market. I was talking about the liquidity. The housing market is pretty huge, but that doesn't make it liquid.

and thus have higher transaction costs

$11 sounds pretty close to stock commissions, on an illiquid bond you may get hit a little harder on the spread.


Even if the difference is minor, the transactional cost is higher for bonds, so temsike's statement was correct.

If you want to make the argument that the transactional cost is less for bonds than for equities, go for it.
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us