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| Today we deal with bonds |
We finally correctly set up our auto sell order on Scottrade for INFY, but it looks like there isn't too much movement. We have lost a little, but it is within the threshold we've set, so it stays. It's hard to guess if the world is going to fall apart or not. No news is good news?
As always, we need to buy something. Maybe treasury bonds. We don't know anything about bonds, so that might be a good idea. We tend to drag our feet on making a buy decision, but looking at buying bonds through Scottrade is not so great for us.
As you can see, there is a $1000 minimum (our usual investment is $500) and a $38 fee to buy just one bond. If you factor in the likely cost of selling, it quickly becomes less and less worth it. Granted, if you are dealing in more normal amounts, it starts to make sense. But since we are really just sort of dinking around, trying to learn, it's not a good fit. Unfortunately, there's not really much better, as far as trading fees are concerned.
However, there are bond ETFs that might work for us. Similar to the way it is more feasible for us to purchase one share of SPY, which matches the entire S&P 500, it might be better to get a bond ETF. This could give us regular payments, sort of like dividends. It is worth considering.
When you buy a bond, you will definitely get at least your money back. With the bond ETF, you could lose money on it. With bonds, you could lose out it interest rates get more favorable. Whereas with an ETF, if the value of the fund changes you can lose money--but the inverseW is true. As always, its that balance of risk and reward.
Profit!
