How to Invest in European Bonds
Investing in European bonds is a way to diversify your investment assets. It allows you to receive income in both US dollars or in European denomination currency. Investing in bonds can be done on your own or through the use of an investment professional like a financial adviser.
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Instructions
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Investable assets
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Make sure you have assets liquidated to make your European bond purchase. Bonds are issued in $1000 denominations. Bond prices don't necessarily cost $1000. Bond prices fluctuate and this will affect the price you pay.
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Open an investment account. These accounts are not FDIC insured like bank accounts. Investment account can be opened by calling a full-service brokerage account like Morgan Stanley Smith Barney, Merrill Lynch, UBS etc. You can also open an account at a discount brokerage firm like TD Ameritrade, Charles Schwab etc. Phone numbers for new accounts or opening procedures can be obtained at each of these firms' respective websites.
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European bonds are issued by each country that is a part of the European Union. Decide what country you want to invest so you can buy those bonds. Different countries in the European Union carry different risks. Some things to consider are: size of the country, industries within the country, and ratings assigned to each bond.
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Tips & Warnings
When investing in European bonds consider that fluctuations in currency can affect the profitability of your bond portfolio.
References
- Photo Credit europe image by Christophe Fouquin from Fotolia.com
