Question from My Newest Follower: Buying Bonds

I found a question from one of the six followers just today in an older blog.  I only know the identity of one of them.  I am not likely to see any comment in older blogs so it is best to attach them in the newest blog even on an unrelated matter.  The question had to do with buying bonds from E Trade without having to pay a brokerage fee.  I am not familiar with that broker. For many years, my broker has allowed corporations to directly market their debt to the broker's customers.  The purchase would be at par value in the minimum unit of 1 bond equals $1,000.  No commission would be applied by my broker for bonds purchased in that manner, called a Corporate Notes type of program.  Although I do not know, I suspect that the broker charges a fee to the company for allowing the corporation access to the broker's customers, possibly some percentage of the amount so sold. 

I buy bonds in every way to buy them.  I have bought bonds in the way described by the reader, that is, directly from the broker at par value.  I prefer myself to be an opportunistic buyer and seller of bonds in whatever avenue or form that is the most advantageous at the time.   Some of the opportunities come by buying them at a steep discount to par value which juices the yield.  That option is not available when you buy at par value.  So the commission is not an important factor anymore.  I pay the same fee to sell a bond as I do a stock, and it is below $10.  That is not material consideration. Throughout these posts, I discuss other bonds, like exchange traded bonds available as purchases on a stock exchange and Trust Certificates that contain a bond as their underlying security.    A Trust Preferred is a junior bond traded on the stock exchanges.  Then you have others that are not Trust Preferred issues, and may even be senior bonds, that trade on the stock exchange that I discuss in my blog and currently have very small positions like PFX, FCY, & FCZ.    I try to go wherever I have the best opportunity at any given point in time, hopefully finding the most bang for the buck.   For me commissions are never the issue.  Many of my purchases of TCs in the 4th quarter of 2008 were in that vein.

If the reader needs any additional assistance, they can contact me directly at the email address provided in the profile.  

I also found a question about ING eliminating the common stock dividend.  I just responded to that comment.  ING is still paying its preferred stock dividends.  I recently collected links to a number of posts on the ING preferred stocks in one gateway post:ING Preferred Stocks: Links in one Post