HOW AND WHERE TO BUY BONDS?

Bonds may be lower risk, but they are not risk-free. You should research bondsjust as you would stocks before purchasing them. Learn how and where to buy bonds

Now that you what bonds are, you might be asking yourself how to actually get into the bond market. Let’s take a look at how to buy bonds, where to buy bonds and what to look out for.

Where to buy bonds?

Bonds can be bought either online or with a broker.

Directly from the Fed

In the U.S., you can buy bonds directly from the government through TreasuryDirect. All transactions and interest payments are done electronically. The Bureau of the Public Debt started TreasuryDirect so that people could bypass a broker completely if they wanted to.

Through a Broker

Be careful when using a broker. Typically, the broker will slightly mark up the price and happily tell you that the trade is totally commission free. This mark up will essentially be the same thing. The best thing to do is to simply look up the latest quote for the bond to make sure you’re not being taken advantage of.

Through a Mutual Fund

Buying individual bonds makes sense if you own a lot of them and hold them to maturity. Most people don’t do that, though. Most are better off buying bonds through a mutual fund, if only for diversification’s sake.

How to buy bonds (effectively?)

There are a number of important questions to ask yourself before buying bonds.

What is the maturity of the bond?
What’s the price?
Does it have early redemption features such as a call date?
What is the credit quality?
What is the rating? Is it insured?
What is the interest rate?
What is the tax status?

Bonds are not nearly as liquid as stocks and ETFs, and therefore there is not nearly as much information publicly and freely available. If you are going to buy bonds, always buy them from a reputable source and always check your prices to make sure you are getting a fair price. Also, you must remember that when you buy a bond your return is called the Yield to Maturity and NOT the Coupon Rate. If you buy a bond below $1,000 you will yield MORE THAN the Coupon Rate; and if you buy a bond above $1,000 you will yield LESS THAN the Coupon rate.

All of this information on how to buy bonds can be overwhelming. Although bonds are technically lower risk, it’s still really important that you understand both how and where to buy bonds. Our Investing in Different Markets course covers all of it and more.

WALL STREET SURVIVOR'S BEST OF THE BEST LIST

FEBRUARY 15, 2020: URGENT UPDATES TO HELP YOU MAKE MONEY ON THE MARKET!

Get the BEST STOCK RECOMMENDATIONS from THIS Stock Newsletter: TRY IT FOR JUST $19

The Motley Fool Stock Advisor ranks as the #1 Best Investment Newsletter for the fourth year in a row of the dozens that we we track. Their stock recommendations continue to beat all of the other newsletters that we follow and they maintain a very high accuracy of their picks. Their 96 stock picks from the last 4 years have outperformed the market by an average of 44% as of February 15, 2020. Read that again. I didn’t say their stock picks are up an average of 44%, I said they have BEAT THE MARKET by 44%.

No other newsletter comes close to that. You may have seen the Motley Fool’ advertisements that their picks are up 367% compared to the market’s 80%. Is The Motley Fool’s Stock Advisor really as good as they claim?

Our results, at least for the 4 years since January 2016, suggest YES. On January 2, 2020 they recommended TESLA when it was at $425 and it is now over $800 in just a month. They also re-recommended AMZN the last week of January and it released record earnings the next week and the stock is up $300 in 2 weeks. You can now get their next stock picks in real-time for ONLY $19. You will also receive their list of the TOP 10 Stocks to Buy Right Now. This special pricing is for NEW customers only and you must click on this link to get the special price..

Get the Motley Fool's Next Stock Picks for $19

P.S. this offer is still backed by their 30-day money back guarantee.

P.S.S. Still skeptical? Read this complete Motley Fool Review.

GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here's the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW

(before it's too late)