No. of Recommendations: 4
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.
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