And information about bond prices, once relegated to professionals, is available on numerous Internet sites. That's not exactly couch change, but many people have much more than that in college savings or retirement plans. The cost advantages of the individual bond portfolio rose as the amount invested increased. Jim Peterson, vice president of the Center for Investment Research, says the hypothetical portfolios each consisted of five bonds, with maturities ranging from 2 to 10 years. Individual bonds are most appropriate for investors who plan to hold their bonds until maturity.
Bond funds are much more liquid.
You can always redeem your shares at the fund's net asset value. You may lose money on the sale, but you won't have trouble finding a buyer. Your need for a regular source of fixed income. When you buy an individual bond, you earn the right to receive a fixed income payment at set intervals, usually semi-annually or quarterly. Bond funds also pay income, usually on a monthly basis, but the amount you receive can fluctuate.