This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

(Graphic: Charles Schwab)

When making household purchases over $1,000, 63 percent of investors surveyed believe it is extremely important to find the best price. A large majority (82 percent) say they do extensive research before making a buying decision, with 88 percent saying they collect three or more prices for comparison, and 65 percent saying their research spans a few days or even weeks.

Barbecues vs. Bonds: A Dichotomy

Despite their bargain hunter ways, our survey indicates that investors aren’t as likely to search for the best deal when it comes to financial products. The contrast is particularly striking when it comes to buying bonds. Fifty-five percent of study respondents say they are extremely likely to shop around for mortgages, 48 percent and 39 percent say the same about credit cards and auto insurance, respectively; yet only 17 percent are extremely likely to shop around for bonds.

“Fewer than one in five investors shop around for bonds, which we think has less to do with investor behavior and more to do with industry barriers that get in the way of investors’ interests,” said Crawford. “There is no industry standard for how bond prices are marked up, and as a result investors are unclear about how much bonds cost and uncertain about how to shop for the best prices.”

How Much is That Bond in the Window?

According to a July 2013 Patpatia & Associates, Inc. study on fixed income marketing, pricing and support practices 1, bond investors can pay mark-ups of up to $21 per bond at some brokerage firms, compared to just $1 per bond transaction cost for most on-line secondary trades at Schwab. Hypothetically, this $20 price difference would reduce the yield earned on a 4%, semi-annual paying, 10-year bond by .25%.

“Every basis point counts,” said Crawford. “By getting the lowest price on a given bond, investors can increase their yield.”

2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,090.02 -72.97 -0.40%
S&P 500 2,114.40 -9.08 -0.43%
NASDAQ 5,086.02 -20.5730 -0.40%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs