Are you buying corporate bonds?

[lawman]

Like some others here I sold a large bond mutual fund and have started investing in individual notes. Being new at this I started with with C. D.'s, then T-Bills and have now bought several T-Bills at auction..I've only bought a few corporate notes and only small amounts of those. I'm itching to reach for more yield and am considering buying some longer term corporate notes and buying larger amounts. I know nothing of researching balance sheets and really don't care to learn. I look at some that are mentioned here but few of those are in Schwab's inventory and getting through to Schwab's bond desk takes way too long for me. Besides I don't have a good understanding of the procedure for making an offer through their bond desk for bonds that are not in their inventory. I can search bonds in their inventory but I'm still very leery of just buying something just based on ratings..And besides I don't see any screaming deals like the ones I see discussed here. Do any of you buy bonds based solely on ratings? Should I just stick to C.D.'s and treasuries?

 

[jazz4cash]

I think you should create a guest account at Fidelity and checkout their bond offerings. It’s generally pretty easy to navigate the site. I find it pretty easy to select the “view recent trades” and place an offer between the last trade and the asking price. It does take some time, effort and patience to get comfortable with the process. I share your pain on evaluating balance sheets. I offset that by taking small positions.

 

[lawman]

I think you should create a guest account at Fidelity and checkout their bond offerings. It’s generally pretty easy to navigate the site. I find it pretty easy to select the “view recent trades” and place an offer between the last trade and the asking price. It does take some time, effort and patience to get comfortable with the process. I share your pain on evaluating balance sheets. I offset that by taking small positions.

Are you able to make an offer without talking to someone?

 

[jazz4cash]

Yes.

 

[aja8888]

Just a reminder

Lawman, I think we told you a couple of times recently to stay away from Credit Suisse bonds.

 

[lawman]

Lawman, I think we told you a couple of times recently to stay away from Credit Suisse bonds.

Yes and I did. Thank you.

 

[lawman]

Okay just bought CUSIP 3130ATJ65. It is a government agency FHLB with YTM 5.25%. it matures 10/25/27. I'm wanting to begin to pick up a few 5 year maturities. Good deal or bad deal?

 

[Freedom56]

Okay just bought CUSIP 3130ATJ65. It is a government agency FHLB with YTM 5.25%. it matures 10/25/27. I'm wanting to begin to pick up a few 5 year maturities. Good deal or bad deal?

You bought a AAA/AA+ Agency note backed by the USG with a coupon of 5.25%. Your only risk is an early call. A year ago the coupon was around 0.6% for the same term but non callable for obvious reasons. You tell us if you got a good deal or not. Dude we are in the "golden period" of fixed income investing. The deals are only going to get better as we enter tax loss selling season.

 

[lawman]

You bought a AAA/AA+ Agency note backed by the USG with a coupon of 5.25%. Your only risk is an early call. A year ago the coupon was around 0.6% for the same term but non callable for obvious reasons. You tell us if you got a good deal or not. Dude we are in the "golden period" of fixed income investing. The deals are only going to get better as we enter tax loss selling season.

I'm listening! I just wish I was more experienced at this..I know rates are still rising but at some point there will come the the time to invest in some longer maturities (5 - 7 years). We may not be there yet but I think we may be getting close..I just wish I had the knowledge to get in on some of the bargains you think are coming but I suppose those good deals will be on "B" rated bonds that I am not comfortable choosing..To answer your question I'm thrilled with 5.25% for 5 years unless you tell me I'm a sucker..

 

[Freedom56]

I'm listening! I just wish I was more experienced at this..I know rates are still rising but at some point there will come the the time to invest in some longer maturities (5 - 7 years). We may not be there yet but I think we may be getting close..I just wish I had the knowledge to get in on some of the bargains you think are coming but I suppose those good deals will be on "B" rated bonds that I am not comfortable choosing..To answer your question I'm thrilled with 5.25% for 5 years unless you tell me I'm a sucker..

You will do fine. You locked in 5.25% on a government back agency note. I have bought many 2027 maturities and even one 2028 maturity. Think of all those bond funds that bought the same term note last year with a 0.6%. But they have call protection.

A year from now, you will be an expert. It really isn't that difficult. You will soon realize like many fixed income investors that you can live off the coupon payments and never worry about withdrawal rates and losing your capital.

 

[daylatedollarshort]

I've been buying TIPS and Treasuries, may branch into agency bonds. So far I haven't felt like putting the effort into researching corporates, as I have other hobbies that make / save money that I personally enjoy more. So the government / agency bonds are my 80/20.

I also don't have $10M to invest in fixed income, so a $20K bond default would hurt.

 

[lawman]

I've been buying TIPS and Treasuries, may branch into agency bonds. So far I haven't felt like putting the effort into researching corporates, as I have other hobbies that make / save money that I personally enjoy more. So the government / agency bonds are my 80/20.

I also don't have $10M to invest in fixed income, so a $20K bond default would hurt.

My fear of default is what kept me in my bond fund so long..Just didn't know I could lose more in the fund than from a default.

 

[daylatedollarshort]

My fear of default is what kept me in my bond fund so long..Just didn't know I could lose more in the fund than from a default.

Well, normally you wouldn't lose that much in a bond fund. It was just this huge spike in rates this year changed things. I had bond funds up until the beginning of the year when the Fed said they were going to raise rates 6 - 7 times and then I bailed.