I'm planning to purchase some corporate bonds to lock in a steady revenue stream. But I can't seem to find much information on the web about bonds, where to buy them, how to analzye one versus another. If you know any good sites, plese let me know.Right now I am considering the triple A bonds from the Tennesse Valley Authory maturing in 2043 with a current yield of 8.0%Thanks for any help.
'm planning to purchase some corporate bonds to lock in a steady revenue stream. But I can't seem to find much information on the web about bonds, where to buy them, how to analzye one versus another. If you know any good sites, plese let me know.Right now I am considering the triple A bonds from the Tennesse Valley Authory maturing in 2043 with a current yield of 8.0%There's not a lot on the web; but there's not a lot on this subject anywhere that I've been able to determine. Probably because it's basically a more simple subject, once you get comfortable with the basics. If you haven't done it, read all the way through the messages on this board: that will give you a great grounding. The best book with an overall intro I've found is Bond Market Rules by Michael D. Sheimo. There are others, I'm sure, but this one approaches the whole topic in short chapters that explain the basics fairly clearly.E*Trade is one on-line broker that actually provides quite a bit of info and the means to do the buying and selling. Their site takes a bit of getting used to, but does help with setting up ladders, etc.mathetes
You will find basic information on bonds (including the Foolish summary of the subject) from links in message 218 on this board; bonds on line summary in message 219, more in message 242; bond yields info in message 40; CD rates in message 36; Moodys link in message 217, yield differentials in message 240.For each of these, enter the desired message number in the box at the upper right hand corner of the screen then press go.Most brokers have bond desks that specialize in bonds. They are the ones who make the quotes. There are also bond dealers out there. Decide what kind of bond you want, what maturity, and what bond rating. The Moodys info and Treasury yield curve should tell what price to expect for any combination. From there, get several quotes and make the best deal you can. Keep in mind that for every bond listed, many more are traded over the counter. Dealers have lists of them ("pink sheets" I think). Most of the info is not on line. Usually you can get new issues at somewhat lower cost.Waterhouse also gets mentioned as having an on-line bond listing, but its a posted list, not on-line trading. E-trade usually offers better prices they say.
I have some of that bond, got it several years ago. It is my opinion that you will probably do better in buying bonds from a full service broker such as Merrill Lynch than in the discounters. However, you may need to tell your broker which bond you want and ask that it be bought in the market rather than from inventory, which won't please the broker much but will save you some cash. With a TVA bond, since TVA is a government agency your interest is not subject to state tax, although it is subject to federal tax, sort of like a treasury. That makes that 8% yet a little more attractive. While I do my stock trading with Brown, the first time I had a bond I had bought through them mature I was distressed to learn they charged me a selling commission. Also, the trading costs on buying bonds are the same with Brown or Merrill. So I leave the discounter to what they do best, which is trading stocks. Incidentally if you have not bought a bond before, you should know that unlike a stock, a bond is sold with accrued interest. That is, you pay the person you are buying the bond from the interest that has accrued from the date on which the bond last paid its coupon. This is different from a stock, where you get all of a quarterly dividend on a specific day, and no part of the dividend if you sell between those dates. Best wishes, Chris
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