How to buy Corporate Bonds

Corporate bonds are a great way to diversify your portfolio. These types of bonds do pose certain that you need to factor in but they are extremely profitable. With a little research you can greatly reduce your risk and make a ton of money in corporate bonds.

First your going to need a broker. There are many discount brokers to be found online that offer corporate bonds with low transaction cost. Be sure to choose one that offers a big selection of corporate bonds to choose from.

Always buy corporate bonds for major companies. These are companies with huge market caps. These bonds a little less than smaller companies but are a lot safer. Be sure to inspect the companies credit rating. Triple A credit ratings are the highest and safest.

While the terms of the bonds differ greatly avoid buying bonds with long term maturity dates. Even if a company is a safe bet you don't know what is going to happen to the market for them in ten years. Stick to bonds between one year and five years.

Always buy bonds at a discount. There are many great quality bonds you can buy that are at a discount. This is important. We are buying corporate bonds to make money not lose it.

Check out the company issuing the bond. Do they have the biggest market share of their industry? Have they been consistently turning a profit for the past five years. You need to know that the company is going to pay you back your money plus interest.