Bond Investing?

In an effort to diversify my portfolio, I am looking to invest some cash in bonds. I'm predominantly in stocks now, and have a good foundation on various types of bonds from an educational standpoint.

In terms of investing though - where can i find some info on what to look for when considering a bond investment?

I would prefer to go into bonds solo as opposed to bond mutual funds to avoid management fees.

Is this possible?

First response is relevant if you are okay with a bond fund, but to roll your own, you will need to do a bit of research. First, decide how much risk you are willing to take, and that will tell you whether to stick with A or better, or whether you can do with lower grade stuff -- which will yield more, as long as the issuer remains solvent. The major drawback of individual bonds is that you need a fair amount of cash to do it -- almost anything less than $100,000 is an odd lot. As for myself, I like REIT's; they are a nice compromise between safety and decent yield, and offer growth potential as well.

Bonds, especially investment-grade bonds, are pretty much a commodity. There is little differentiation between the yields of investment-grade bonds of a similar maturity. In other words, it is very difficult for money managers to find "hidden gems".

Therefore, the best way to choose your bond mutual fund is by the expenses charged. The lower the expenses, the more you keep. In this respect, www.vanguard.com wins hands down. In fact they just released a 10-year study showing how every single one of their bond and money market accounts were top of their class for the last 10 years. And, it was all due to costs.

When considering a bond fund, the average duration and the credit rating are two important factors to consider. I recommend funds with duration of 6 years or less and ones that hold credit ratings of BBB and above.

For more info about bonds, download my free book and read the 3 chapters on "The Anatomy of Bonds". Click on my profile to get the site.

The easiest way to invest in bonds is through inflation-protected Treasuries, called TIPS. If not in a retirement account, then you can buy them with no commissions at www.treasurydirect.gov

The yields are inverse to stocks. bonds used to be for widows and orphans--meaning they are stable,boring and produce a steady income stream. you want the highest rating A or better. the lower the rating the more likely you will buy a "junk bond" high yield but likely to lose. remember, bonds are creditors, stocks are owners. our $group is now shorting stocks, like aapl, dell, and others..you should have an investing plan. it depends on your age