SGS Cyprus

Archive for October, 2009

Like stocks, bonds are sold commission free in their initial offerings.  Prices are low, because of the huge amount of bonds an the market, and the commissions are paid for by the issuer.  You also get a prospectus if you buy on the initial offerings—prospectuses are rarely available to buyers in the secondary market.

Bonds are one investment in which a full-service broker may be cheaper than a discount broker.  A discount broker may have to go to a dealer first to buy the bond you want.  The dealer will charge a markup.  Then, the discounter will put a commission on it, even if it’s a small one, before he or she sells it to you.  There’s no guarantee that your full-service broker will always be cheaper than your discount broker, but it is always worthwhile to check before buying.

Also, don’t assume that just because the broker discounts stock commissions he or she won’t put a markup on bonds.  You should always make sure you know both the bid and the ask price, even when buying from a discounter.