Evaluate Convertible Bonds Like a Pro

A lot of investors fed up with the volatility in tech stocks are turning to something called a convertible bond. Until now, that usually meant buying a mutual fund that invests in convertible bonds. And for good reason. Convertibles can be tough to find, and even tougher to evaluate. Hence the need for professional help. (See a recent story on convertible bond funds.)

Now a couple of Web sites come with online tools that let you analyze convertibles just like a pro. Plus, you'll find sites on the Web that can help you screen (that is search) for individual convertible issues or funds.

So what are convertible bonds and why are they so tough to figure out? Think of a convertible -- some people call them converts -- as a hybrid between a bond and a stock. Buy a convertible issued by, say, America Online (AOL Quote) and you get a fixed income stream, just as you would with any bond. But you also receive the right to convert your bond into a fixed number of shares of the company's stock. ...