Watch out for the 'Deal Of A Lifetime'. When scouting for your bond funds, watch out for the deal that seems too good to be true. If you see that a few brokers are quoting much lower than average, ask: Why so? If you you can never speak to an individual, or you have to wait 'on hold' for a long time, this indicates the level of service you are likely to get

An important criterion is whether they offer a reliable, trustworthy service. If they haven't got an office, or you can't get them on the 'phone, or they won't return your calls, or they take your money and you never hear from them again, can you say you got a good deal, even if it was cheap?

Fund Management: Bond markets today are complex. Make sure the company is committed to providing the research and analysis that bond fund management now requires.

Bond investing: You're probably looking for the cheapest deal you can find. This is the era of Wal-Mart and cheap Chinese imports. People expect to get a takeaway for £2.11, and clothe themselves for £20.11. Buy cheap, and you get what you pay for.

I have a confession to make: I'm a supercilious devil. I get a lot of emails from people enquiring about bond investing I know are wasting my time. They've been to a dozen web sites, sent each one a one-line email saying "Help me give it to me NOW", sometimes adding "for free!".

When you do give a (considered) reply, you hear nothing back. The best ones are the out-and-out parasites. They'll call you up, asking detailed questions, say thanks very much, then take their bond investing-related business(?) elsewhere (if they can bear to creak open their wallets at all).

I used to wonder why sales people were sometimes so abrupt. No more. They have their quotas, and after 2678 calls, the clerk gets to know a hot prospect, or a time-waster pretty quickly.

Brokers - ask about:
How long they've been in business;
If they're insurance backed;
Any (hidden) fees?
Areas covered;


Duration estimates how much a bond's price fluctuates with changes in interest rates. If rates rise 1.00%, for example, a fund with a 5-year duration is likely to lose about 5.00% of its value.

Average Maturity: A bond fund maintains a currency-weighted average maturity, which is the average of all the current maturities of the individual bonds in the fund. The longer the average maturity, the more sensitive the fund will be to changes in interest rates.

Bonds are for 'bears'. The biggest boost for bonds is a recession that lead to a threat of deflation. Economy goes down, bonds go up. Economy goes up, bonds go down.

Educate yourself about the market. Understand what you are buying. Many people don't understand how bond investing works. This could be one of the biggest purchases you will ever make. Know your rights before you buy in. Do your research.

Do your own 'due diligence' by typing the name of the broker into a search engine, along with the words "problem" or "scam" or "bad experience". This should show any negative postings about them. If there more than one or two, or the allegations look substantial, avoid them.