Only buy bond securities via the lowest fee fixed income market index funds

Bond and fixed income trading is a very complex investing undertaking that personal investors should entrust only to very professional bond and fixed income index mutual fund portfolio managers. The trading and pricing of bond securities is far more convoluted than the pricing of equities.

Moreover, bond and fixed income pricing is much less open, and bond investment securities and the bond and fixed income markets have very substantial bid and ask spreads. Realistically, you purchase bond and fixed income investments at retail price and sell fixed income investment securities at less favorable discounted wholesale values that very much are in favor of the fixed income and bond market investment bankers.

Personal investors benefit, if they comprehend an increased amount about bond market index fund fees

Fixed income trading security market pricing is very different from the markets for stock securities. A public company usually has only one type of stock. On the other hand, this same publically traded company could have dozens, even many hundreds, of separate outstanding bond and fixed income securities. Relatively few personal investors possess the necessary skills, know-how, and experience to assess fixed income securities prices. Bond and fixed income securities possess differing value characteristics than do common stock securities. Furthermore, issued fixed income and bond investment securities require alternative price setting methods.

Common stock asset securities give the investor a right to claim part of the stock market value of the publically traded firm plus to dividend payouts, when the Board of Directors declares such dividend payments. In contrast to common stocks, corporate fixed income and bond investments give their owners a greater right to the public firm’s net cash flow to pay bond and fixed income investment security principal and interest payouts. When bondowners’ claims to the firm’s operating cash flow are not met, then default and bankruptcy could happen.

The publically traded company may be forced to recapitalize in bankruptcy, and all common stock ownership might pass to its creditors or bondholders. These bankruptcies usually are very slow, distasteful and difficult processes.

These concerns are called the risk of default. Projections concerning the different potential for default could cause large differences in price for fixed income and bond holdings which otherwise could have the same prices. Figuring out if fixed income and bond obligations would likely to be fulfilled by fixed income and bond issuing enterprises during the life of the bond security is best turned over to experienced bond and fixed income market index fund portfolio managers.

A comprehensive and automated lifetime planner with a personal money management program is recommended to establish a fully comprehensive lifetime financial plan that includes fixed income and bond securities

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