Selling Bonds - How To Sell Bonds and fixed income

The Bond Market and learning to Sell Bonds

Where is the money in the bond market or any fixed income area? Institutions. Institutions are the “life blood” of the bond market and the primary income source for bond brokers. Commercial Banks, Savings Banks, Credit Unions, Insurance Companies, and Municipalities (City, County, and other local government authorities). We will look deep inside this misunderstood area of investments. We will examine each type of institution, what they historically buy, who they buy from, which dealers to use, how to request and examine a portfolio, who to ask for and much more.

The benefits of dealing with institutions, especially banks and credit unions, is that you are not dealing with the personal money of the person you are talking to. Meaning, in most financial prospecting situations, you are usually working with an individual looking to invest HIS money. Institutions do not work that way of course. You are dealing with people who are hired to manage the portfolio for the benefit of the institution. This person will not have the paranoia that can set in with retail investors when brokers call them. The institutional manager will judge you in other ways for sure, but he will look at you based on service and need you can provide, plus he is not allowed to buy risky investments anyway.

Public institutions (banks, credit unions, municipal authorities) do not buy stock or other equities, The risk the principal itself in fixed income is minimal. There is price risk and market risk even with the safest investments though. Banks usually, or should have a pretty balanced portfolio. Treasury securities, agencies, mortgage backed securities, bank CD’s, and municipal bonds primarily. We will discuss this in detail when looking at banks specifically.

Credit Unions are also a major factor in the fixed income market. Credit unions need to be handled a little differently. Credit unions are “not for profit” institutions. They do not pay taxes. However, they do look to generate added income for the benefit of their members, which can translate into better services to their membership. Credit unions, especially the smaller ones (under 10 million in assets), are managed by people who have other functions or jobs outside the credit union. Credit unions will buy different fixed income product, but the smaller ones tend to stick with bank CD’s or they invest with their corporate credit union. As with banks, we will dedicate a section just for credit unions.

You should learn how to market to Municipalities (cities, towns, authorities). These Governments are very limited in what they can invest in. They are obviously dealing with tax money and general revenues from their local area. Straight agencies, treasuries and some CD’s are usually about it. They are limited like I said, but if they buy $20 million dollars worth of an agency bond, that’s pretty good. Municipalities will have their own section later.

Maximize your production and to build a long lasting career. The following areas and elements of the institutional fixed income market:

You need to understand this market to succeed in it. The people you are going to speak with are professionals who will know if you can bring value to them or not. If you dedicate yourself to learning what you need to know, it is a very lucrative area of the market, where you client list can build steadily, and the money you are advising on can grow infinitely.

The Bond Bible - Whatever your age, income or total assets, bonds belong in your portfolio. A symbol of security, bonds have long had a place in any well-rounded portfolio. As millions of baby boomers shift their focus from the lure of capital appreciation to the necessity of capital preservation, bonds are moving from a supporting role to the spotlight. Many individual investors, however, know precious little about them. Marilyn Cohen, one of the nation's best known columnists and commentators on the bond market, demystifies bond investing and offers a shopper's guide to finding great bond buys and a master blueprint for building a winning personal bond portfolio.

The Fundamentals of Municipal Bonds, 5th Edition - This informative volume is an update of the long-heralded classic text on the municipal securities market. Written by Judy Wesalo Temel for The Bond Market Association–the leading trade association that represents the players in this market and whose members underwrite 900f all municipal bonds–this newly revised Fifth Edition deals comprehensively with the many recent developments in the municipal securities market. It provides a basic understanding of the market for a wide range of readers, including experienced professionals, public officials, private investors, academicians, and students.

The Strategic Bond Investor : Strategies and Tools to Unlock the Power of the Bond Market - The Strategic Bond Investor reveals a dramatic new approach for using bonds to balance portfolios while grabbing profit opportunities as they present themselves. It represents a new style of bond investing, bold yet risk-conscious, that is long overdue for today's transformed market environment. Investors looking to diversify their portfolios will discover: Key economic releases and how they influence bond prices, Popular fixed-income portfolio management strategies and the best-performing bonds in a variety of economic circumstances.

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