Jump to content
House Price Crash Forum
Sign in to follow this  
WageslaveX14

Buying Individual Corporate Bonds

Recommended Posts

I'd be grateful if anyone could help with the following:

What's the best way to buy individual corporate bonds? Has anyone on here done this, and can they point out any pitfalls? I don't want to buy a bond fund, but I've never used a broker, and I don't know how to assess if the spread I'll be offered is standard, extortionate or otherwise.

Any tips?

Share this post


Link to post
Share on other sites

A private investor can buy individual bonds, but you're likely to be ripped off :o .

I don't know why anyone would want to buy debt right now - default rates are rising and bonds will get killed if QE fails.

Share this post


Link to post
Share on other sites

Yeah, but not all companies suffer the same risks, and some have implicit state backing.

I was basically looking for tips on how not to get ripped off, as I can see the buying process being a bit opaque.

Share this post


Link to post
Share on other sites
Yeah, but not all companies suffer the same risks, and some have implicit state backing.

I was basically looking for tips on how not to get ripped off, as I can see the buying process being a bit opaque.

Um, do you have a stockbroker you trust?

If yes, go to them. If no, stay clear of it - or tell us if you come upon an alternative strategy!

AIUI individual bonds can have rather poor liquidity - which manifests in bid/offer spreads that are much larger than for equities. If that's wrong I'd like to know: bonds in the right companies could be a sensible alternative to cash savings if the spread doesn't kill it.

I have a few K in bonds, and they've made good returns. But that's bond funds.

Share this post


Link to post
Share on other sites

Yeah I think corporate bond funds are the way to go, as the experts know what they're doing. You can also trade in and out of them quite easily. Having said all that I've just sold my holdings as I think a bubble is forming. If deflation hits I can buy them back more cheaply than they are now, and if serious inflation hits then bond pricess will get slaughtered anyway.

Share this post


Link to post
Share on other sites
Yeah I think corporate bond funds are the way to go, as the experts know what they're doing. You can also trade in and out of them quite easily. Having said all that I've just sold my holdings as I think a bubble is forming. If deflation hits I can buy them back more cheaply than they are now, and if serious inflation hits then bond pricess will get slaughtered anyway.

Do you have evidence of bubble?

In the case of individual bonds, I can look at face value, yields, redemption dates etc, take a view on the health of the company, and make an informed decision. But bond funds are less transparent. I still hold some, but in view of the big gains they've made in the last three months or so I'm wondering if the time has come to take profits, and would love to be better-placed to take a view.

On the upside, they're still below boom-time values, so there's scope for rises so long as the market is confident about defaults.

Share this post


Link to post
Share on other sites

It depends on whether you think the depression has been averted or if we're in the early stages of a debt fuelled death spiral.

I might buy my bonds back if there is a pullback, but we're still in an epic debt bear market :o .

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   292 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.