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I have two different discount brokers, and they both have ‘bond centers’ where customers can research and buy or sell bonds.

Trading bonds is a bit different than trading stocks. For some reason, not all bonds show limit style orders available in my brokers’ interfaces, though even then, you can enter a price and quantity (and have the price rejected if the broker/dealer won’t take it). In addition, while the bond market in aggregate is larger than the stock market, individual bonds are often thinly traded. That leads to large bid/ask spreads and prices that are often tied either to general rates for that duration and quality or to a high individual company risk premium if there is specific news on the company.

I’m personally leaning towards using a bond ladder for my own retirement portfolio for short to mid term needs once I get closer to retirement age. That said, the liquidity differences I’m seeing between stocks and bonds indicates to me that I should carefully select my bonds to have them be a decent likelihood of ‘one decision’ investments.

Discovery/HR Home Fool
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