Unless you're paying a broker to deal on your behalf, you're gonna get your ass handed to you trying to trade individual bonds. Just buy a bond fund like a normal person.

>>1382814
How exactly will I "get my ass handed to me."

Also do you say this from experience?

>>1382815
Huge volumes of bond sales happen in private transactions and quasi-closed markets. The best deals get made between firms with established trading desks that deal in high volume. An individual buyer like you isn't even going to be able to get access to but a tiny fraction of potential transactions, and you'll get the least favorable pricing possible.

>>1382817
Yeah but I still can't lose money in the long run unless the company defaults, right?

>>1382817
Like if I pay fees to a bond mutual fund, versus getting less favorable pricing, I'm getting cucked either way.

>>1382820
Depends what you pay for the bond. Bonds don't trade at par in the secondary markets.

Besides, "not losing money" is a pretty shitty investment objective.

>>1382810
I'd recommend going for a bond fund. Plus now is the worst possible time to buy bonds considering yield rates are so low.
On top of this the vast majority of the bond market is done by sophisticated investors light years ahead of either of us, giving you an awful position competition wise.

>>1382825
I don't understand your criticism.

You're basically saying "don't do it! You'll make lower returns when compared to institutional investors."

It's like well duh, that applies to pretty much anything you do. That's life for you.

>>1382833
I don't want to keep my money in cash because duh, and I don't want to keep my cash in securities (except for a select few), because I think they're too high right now.

So where else do you suggest I stash my monies?

So let me get this straight.

No one here has actually traded bonds "because they know better."

That feels kinda lonely man.

>>1382835
>You're basically saying "don't do it! You'll make lower returns when compared to institutional investors."
No, I'm saying you'll make lower returns than if you simply buy a bond fund. If you want to own bonds, fine. Its a relatively safe place to store value, and its a solid addition to any well-rounded portfolio. But do it in the most effective way for someone with your level of experience and capital.

Also, stop spazzing out. You sound like a faggot when you complain about getting advice that's contrary to your ill-formed pre-conceived notions. We're trying to help you.

>>1382856
I don't like funds though. All the fun is in selecting your own securities.

>>1382857
we're not investing for the fucking fun of picking securities like they're a race horse or something. we're in this to build wealth. I'd suggest you change your perspective and listen to the advice you've been given.

>>1382860
>we're not investing for the fucking fun of picking securities like they're a race horse or something
I am though!

What you're not?

>>1382810
I work in DCM for a US-based investment bank. I'll do my best to help you.

>How do bonds work?
http://www.investopedia.com/terms/b/bond.asp

>Does anyone here trade bonds?
Yeah.

>Could anyone give me some bond trading tips?
People pay lots of money to go to top-named business schools and work for years to get the chance to learn "bond trading tips." So, no.

>So what stops the dealer from randomly jacking up the price one day and margin calling me?
Look up LTCM, that's what happens when you buy debt-securities (and derivatives) on margin. Just trust me and don't play if you can't afford it.

>In fact how can I even tell who their dealer is in this kind of case?
You don't. Bond dealers aren't like equity brokers. They actually have ethics and are more mature (at least from my ~10yrs of experience).

>Common newbie mistakes?
You'd think this would be self-explanatory but know the difference between bid and ask. We have interns every fucking summer get that basic shit confused.

Funny story about dealer-trust within the debt markets from Lewis' "Liar's Poker."


"Mortgage trader Andy Stone recalls having bought $70m of mortgage bonds at a price of 80 (0.80 cents on the dollar). At Stone's insistence, a bond salesman in California sold them immediately to Ben Franklin Savings and Loan for a price of 83. In minutes Stone had made $2.1m (3% of $70m). After the customary slapping of palms and praising of the salesman over the loud speaker, Stone informed Ranieri (Lewis Ranieri, the head of the mortgage department at the time at Solomon Brothers where Stone worked.

Stone had been a trader for just 8 months and was eager to show his boss how well he had done. Ranieri wasn't pleased. Lewie told that kid, "if you weren't young, I'd fire you right now. Call the customer and tell him you're the asshole that just ripped him off. Tell him you bought the bonds at 80 and the price is therefore not 83 but 80.25."