Thursday, January 6, 2011

Bond Help 2

Investing in bonds is a subject of some importance today.

Information on bonds has been difficult to find. I remember when I started investing I asked our Merrill Lynch broker to give us a list of bonds.  We wanted to buy a bond; interest rates were 18%.  Our broker provided one,  yes one and only one bond to consider.

Today you can research bonds you may want to buy.  If you want to lend your money to a company, you should select a company that is solid.  Try to find a company that meets our four criteria for investing.  Then use the Securities Industry and Financial Markets Association website to gather information on the price of corporate bonds.  Their site is called investinginbonds.com

If you want to buy municipal bonds because you want the tax advantage, you have more challenges.  Researching the credit worthiness of a State, City or County, is not easy. Use the
Municipal Securities Rule Making Board website for information on municipal bonds. This website is called EMMA@msrb.org.

We hear about municipal bonds defaulting, we here about foreign government bonds defaulting, we know GM defaulted, we are concerned that the United States could default; bonds are on our minds.


You know already that I absolutely reject bond funds in my cash flow strategy.  Holding a well financed bond to maturity holds very little risk.  Pools of bonds carry more risk.

Someday bonds will be an attractive asset to include in your cash flow strategy and these two resources will help you select the right bond.

Very Truly Yours,
TheMoneyMadam