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I think you will find answers to your questions and a lot more in the FAQ on this board. Click on line one of the sidebar at the right.

Bonds usually are sold by bond rating and maturity. Bonds rated AAA down to BBB are considered investment grade. Below that are junk bonds. Most investers will be comfortable with bonds rated AA or A, but some will mix in some lower rated bonds in a diversified portfolio usually for higher yield (if you choose them carefully).

Interest rates go up with increasing risk. So low rated bonds, less likely to be able to refund your money at maturity pay higher interest. Similarly longer bonds pay higher interest most of the time.

The relationship of maturity in the current market is usually expressed in the yield curve of Treasury bonds. Punch yield curve into Google for a look at the current yield curve. Treasury bonds are as safe of the US govt, higher than the highest corporate bonds. So all other corporate bonds should pay higher interest. Bonds are priced by their differential from the treasury yield curve.

Short bonds, less than 2 yrs or less maturity, pay the lowest interest. Very long bonds, 30 yrs or more, are out of reach for most individuals. So most individuals would want to buy bonds that mature in 7 to 15 yrs. A bond ladder with bonds maturing at regular intervals is considered one of the most conservative bond investment strategies. By living off the interest and reinvesting in a new longest bond as each one mature, your portfolio pays average market rates and changes only gradually with interest rates.

Most individual investors may buy their bonds from a broker or discount broker. But local muni bonds are also available from the trust department of your bank. Most individuals must plan to hold bonds to maturity. Bonds can be sold but usually only to a bond dealer through your broker at whatever price he offers. That makes them costly to trade. But at maturity you still get full face value back.

If you are in high tax brackets muni bonds which are free of fed taxes can be a better deal than corporate bonds. Most calculate the differential based on their marginal income tax rate to decide. But not that double tax free (free of state income taxes too in the state where issued) and triple (also free of local taxes) are also out there in some localities, especially NYC.

To answer your questions--

"How do you search, evaluate and buy individual bonds?" Decide what maturity and bond rating you want to buy. Your broker will have a list of bonds in inventory he can offer you. He will give you a price. You pay no commission on new issue bonds.

"Why types of bonds are preferable?" How is your risk tolerance? Treasuries are best if you can tolerate no risk. But taking more risk will get you better yields. Investment grade bonds are usually OK.

Muni bonds can be especially attractive because they are paying remarkably high yields due to panic selling. If that works for you, go for it. But note there have been some problems with bond insurance that makes some people nervous. But defaults are rare among investment grade bonds.
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