How To Buy Corporate Bonds Directly?
As an investor can you buy corporate bonds directly? The answer is yes if you know what steps to follow and how to do research. The first step that you need to follow is to locate possible companies and bonds. This research will help you determine what options are available in this sector and help you do thorough research. After you have a list of all the possible corporate bond offerings that may meet your investment criteria then you can start to research. You will need to get the contact information for each company, and it is also a good idea to visit the company website to see what investor information is provided there. Thoroughly researching each prospective bond will give you the information you needed to make the best investing decisions.
If you want to buy corporate bonds directly you will need to use the contact information researched. This can be done using a phone call, an email, a fax, or a letter. When you contact the company inquire if they offer the ability to purchase bonds directly. Some companies will not allow the direct purchase of bonds but many do. The corporate bond market includes thousands of companies so if one does not allow you to buy the bonds directly, cross the company off your list and move on to the next one. You will find that most investment quality bonds are offered directly by the company. There may be some specific requirements in place, such as a minimum purchase amount. These requirements vary from one company to the next so make sure that you are aware of all the requirements for the bond before you decide to buy.
It is also possible to buy corporate bonds directly using programs offered by brokers and investment banks. Fidelity offers a CorporateNotes program that allows investors to purchase bonds when these securities are issued. The bonds are purchased directly from the company and the purchase must be done in increments of $1,000. There are similar programs offered by a number of brokers. Most of these programs allow you to choose the desired term including short or long term corporate bonds. This allows you to make the purchase directly while still customizing the investments you make.
If you buy corporate bonds directly your research is even more critical. The company offering the bonds will provide a biased view of the product so your research will help you determine the true investment value of each bond. The best corporate bonds will be different for each investor so you need to evaluate and compare bonds. This will help you eliminate bonds that have risks which are higher than your acceptable level. Buying these securities directly will help you save on fees, commissions, and expenses. Smart investors know that keeping costs as low as possible will maximize the returns you see with your investments. Some bonds can not be purchased directly but some research will help you find other methods that may be just as effective if you consider these bonds must haves for your investment portfolio.