How to Approach Selling Bonds Online
Selling bonds online can be a much trickier business than buying them. You have a particular bond you want to dump, and the market may or may not want it.
At Fidelity, you’re best off calling a Fidelity fixed-income trader and asking that trader to give you a handle on what the bond is worth. You can then go online, place a “Limit Price” order to sell, and you’ll very likely get what the Fidelity trader told you you’d get. But here’s the catch: Fidelity itself may wind up buying your bond and selling it to someone else at a large markup. However, Fidelity could be a better advocate for its clients if it weren’t also dealing in the bonds its clients are trading. So be it.
Truth be told, you are likely to pay a high markup anywhere if you sell a bond before its maturity. Charles Schwab is similar to Fidelity in that you tend to pay through the nose when selling, says Dalibor Nenadov, a fee-only financial planner with Northern Financial Advisors in Franklin, Michigan. “The bottom line for the average middle class investor is to build a bond ladder, and hold until maturity. Don’t sell before maturity, and don’t try to time rates,” he says.