No. of Recommendations: 0

Jack's advice is solid and sound. If he suggested paper-trading, then that's what you should do. But, frankly, I don't know how it could be done with bonds in any meaningful way, due to the following problems:

(1) Atrociously-wide spreads.
(2) A frequent dearth of offers and bids for outstanding issues.
(3) Onerous, minimum-position sizes getting in.
(4) The frequent near-impossibility of getting out, as in, no bids for the bond you're trying to sell.
(5) The near-impossibility of obtaining historical data more than a year back.
(6) The near-impossibility of doing conventional technical work (MA cross-overs, etc.)

With stocks and Forex, paper-trading is simplicity itself, and there are many places where it can be done with virtual cash and real-time data. But nothing similar exists for corporate bonds, agencies, or munis that I'm aware. For treasuries, one could use futures contracts as a proxy for individual bonds. But it's going to be tough to "dip a toe" in a virtual bond market, because one doesn't exist.

In lieu of that, I'd suggest that you begin to learn how to screen for bonds using E*Trade's search-engine. Also, begin to set up a go/no-go check-list for yourself of what a prospective bond must meet in terms of min yield, min credit-quality, max maturity, presence/absence of tax and structural features, as well as a couple of benchmarks that let you guage where bonds are trading relative to their short, intermediate, and long-term trends.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.