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Author: trader2012 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35345  
Subject: Re: Fidelity vs. E*Trade for Bonds Date: 9/18/2012 12:39 PM
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Howard,

I agree that Fidelity's search-engine (and Zions') has a richer parameter set than E*Trade's. But neither compare to ET's in terms of ease of use. That wouldn't matter to someone who always uses the same set of parameters. Then, as you say, the search could be saved. But I'm constantly experimenting with new ways to torture the data to reveal its secrets, and often enough, going through "the front door" doesn't turn up items revealed by another route.

How to use a search-engine for maximum effectiveness is something none of the introductory bond books talk about, and they really should, because it creates an edge for a would-be bond investor over his/her retail competition. (The big boys, of course, are using Bloomies, which no small investor can afford.)

The required minimum-purchases at Fidelity versus E*"Trade is something I did look at yesterday in some detail, because mins matter to me. At first, I thought Fido had gone to a 5-min, just as Scottrade requires. But whether a sub-five minimum is offered also depends on the underlying desk. Where Fido and ET are re-quoting from the same dealers, the mins tend to be the same. Where the differences arise is from the fact their have established slightly differing networks of dealers.

Gees, bond prices have gotten ridiculous. Yesterday, all ten of my bond alerts at E*Trade were saying that particular holdings of mine had gained in price somewhere between 2.3% and 6.8%. Ditto the eight alerts today. "Congrats", they are saying, "what you already own has gotten even even expensive in price and even more unaffordable." Obviously, a market top is forming, not that prices can't, or won't, go even higher. But I'm having to conclude that the buying season has come to an end for me. YTD, I initiated 87 new positions at a cost of $133k. That's the same number of new positions as all of last year (whose cost was $176k, because a lot of the positions were munis, which have to be bought in fives and close to par, which chews through money fast). So, in terms of putting money to work, I could call it quits for the rest of the year, and rising prices argue that I should.

OTOH, Crazy Ben's policies continue to push me to nearly-daily, new equity highs. E.g., my change in account value from yesterday to the day before was 0.22%, which is ridiculously huge for an all-bond portfolio. True, some of the changes was due to coupons received. But the bulk of it was price changes. I despise the man for the economic damage he is doing to this country. But he is certainly making me richer, dollar by dollar and day by day. That's fun, of course, until things fall apart, which they are going to do, which means it's time to look for a new securities casino to gamble in.

But gees, bonds have been good to me, and the 12-year run I've had has been fabulous. I used to think that investor happiness would be having an account big enough that I could meet the $25,000 minimums that some of the better mutual funds required. These days, $25k have become just petty cash for me, and there's basically nothing in markets I can't afford to do, which doesn't mean that doing the trades would be prudent. But for all practical purposes, my investing/trading choices are no longer limited by money. Meanwhile, the bonds I do already own have an average maturity of 15 years, so I'm also in a position to coast, if I choose. I won't of course. The money game is entertaining enough for own sake that it's likely always to be a part of my life, never mind the genuine insurance function served by keeping investing skills well honed against the day when they might truly be needed.

Charlie
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