Corporate bonds

You may consider buying corporate bonds for the income they provide, as well as the potential price gains, though fewer individuals own these securities directly than own municipals or Treasurys. That's true in part on account of the cost of buying, since you pay higher commissions on purchases smaller than $100,000.

All corporate bonds are rated by independent research firms, and those with the highest ratings typically pay the lowest interest rates — though the interest rates are still higher than comparably rated munis. Debentures, the most common type of corporate bond, are backed by the general credit of the corporation, while asset-backed bonds are backed by specific corporate assets, such as property or equipment.

		Corporate bonds

Par value		$1,000 (though sometimes less)

Terms		1 to 100 years

Trading details		Through brokers

Risk		Variable

Interest		Taxable

Call provisions		Callable

Rated		Rated by Moody’s, S&P, Fitch

Alexandra Lebenthal, President and Chief
Executive Officer of
Alexandra &
James, Inc.

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