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The retail investor is at a serious disadvantage when buying bonds vs. an institutional investor. Brokerages can (and do) generally rob you blind and retail investors cannot buy some of the juiciest bonds because they may not be "registered" for sale to just anyone. So what do you do if you want to buy individual bonds? I pretty much retreat to three strategies:

1) Buy treasuries at auction. You know you won't get screwed and you can buy everything from a 4 week bill to a 30 year bond, to a 10 year TIPS. Schwab lets me buy treasuries at auction for no fee.

2) Buy bonds listed on the NYSE. These generally trade as $1000 par, and you have a reasonable, but not exhaustive, choice of issuers. If you visit the NYSE's website, you can find a list of all the bonds listed on the exchange. At Schwab I can buy these for $2 a bond.

3) Buy the stuff that trades like a stock listed at You have to do your homework here, because this stuff is really a mixed bag. Some of it is really bonds, some is preferred stock, some is a cross between the two. Much of it has optionality or other bells and whistles: callable (very common), adjustable coupons, convertible to equity (mandatory or optional), perpetual, etc. If you don;t know what you are buying, you will be sorry at some point.
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