A Fixed-Income Toolkit for Buying Individual Bonds


This week’s AAII Weekly Digest highlights these
“must-read” AAII articles:


Interest Rate Sensitivity and Bond PricingInterest Rate Sensitivity and Bond Pricing

How can it be that there are times when “safe” assets such as high-quality corporate bonds or U.S. Treasuries exhibit levels of price volatility that may normally be associated with the stock market? This article outlines a set of easy-to-calculate formulas that could reveal how much a bond’s price will change in reaction to an increase or decrease in yield.

Using Bonds Instead of Stocks for Portfolio Income

Stan Richelson

Maximizing consistent and predictable cash flow is key for meeting retirement objectives. By taking a savvy approach to bond buying, you can minimize your taxes, limit your expenses, reduce your risk and increase your predictable cash flow. Municipal bonds can help investors accomplish this.


Who Gets a Dividend Payment After a Trade?

Companies distribute cash dividends to their shareholders at the discretion of the board of directors. The board of directors examines the business prospects, cash generation and cash needs to determine if they can afford to make a distribution of profit in the form of a cash dividend and how large a distribution to make. This article from AAII’s Dividend Investing discusses the key dates surrounding a company’s dividend.


How to Buy Individual Bonds: A Fixed-Income Toolkit

Once you’ve learned about bond basics and reviewed the vast number of bond choices, you’re ready to make decisions on how to invest your funds in bonds. Basically, you have two choices: You can purchase individual bonds, or buy them packaged together as funds. Both choices offer certain advantages. The most compelling reason to buy individual bonds is that bonds come due at a defined time. Unlike bond mutual funds of any kind, individual bonds pay their face value in cash at maturity. This article gives you guidelines for evaluating websites and for locating a bond broker.

Our Member Question for this week is:

Thirty years ago, the biggest one-day stock market drop in Wall Street history took place. Do you think a “Black Monday” crash could occur again?


Vote to answer this week’s Special Question: If you were investing in October of 1987, what were the biggest lessons you learned in the aftermath of Black Monday?

Last Week’s Results:

Are you retired?

Poll results are as of 9 a.m. (Central) on Monday. 2,580 respondents.

AAII Survey: Is Life in Retirement Better?

Do you expect life in retirement will be the best of times—or a step backward? Last week’s reader survey asked retirees and those who are still working what their views are on whether life in retirement is or is expected to be better than when working. We then asked what their biggest financial worry is for retirement. This blog post summarizes the results and responses.

AAII Bond Investing Resources

Think of the bond market as a mystery wrapped in an enigma? You are not alone. But AAII offers a collection of resources to help you navigate the bond analysis, selection and purchasing process.




The AAII Weekly Digest is one of the many benefits of AAII membership. To learn more, consider a 30-day Trial AAII Membership to start becoming an effective manager of your own assets.


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