The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments


Subject:  Looking for Bonds, Part 2 Date:  11/23/2012  1:46 PM
Author:  trader2012 Number:  34520 of 35623

Bond investing --as opposed to bond trading -- is nothing more than comparative shopping. “How much reward am I being offered for accepting how much risk?” So let’s go shopping in the offering-lists.

No matter your broker, if they offer online access to bonds, they likely offer a search-engine, some of which are easier to use than others. (E*Trade and Zions Direct get good marks. Scottrade and TD AmeriTrade not so much, with Fidelity, Schwab, and Vanguard falling somewhere in the middle.) According to the parameters you select, you’ll be returned a list of currently-offered bonds that could number in the thousands. So narrowing your search is a necessity, and --following Ben Graham’s guidelines-- you’re are likely to be one of three types of investors : ‘Defensive’, ‘Enterprising’, ‘Speculative’. Those three can be mapped onto the 22, bond-rating notches as follows:

Defensive Investors will target bonds rated no lower than single-A by any of the three agencies (or the market itself).
Enterprising Investors will target bonds rated lower than single-A by any agencies (or the market itself), but no lower than double-BB.
Speculative Investors will target bonds