The global bond market dwarfs the global stock market. The market for bonds is estimated at $67 trillion, with nearly half of those bonds originated in the United States. That compares to a global stock market valuation of just above $40 trillion, even after the market crash. The $33 trillion of outstanding U.S. debt includes U.S. government bonds, corporate bonds, municipal (state and local) bonds, mortgage-related bonds, and short term money market securities.
Most of these bonds trade daily, just not as visibly as the prices set in the stock market. So perhaps it's time to at least understand the global bond market and the opportunities it offers for portfolio diversification. That's what's behind Fidelity's recent push to inform investors about bonds, and make it easier -- and less expensive -- to create your own portfolio of individual bonds or choose an appropriate bond fund to balance your portfolio.
There are online educational seminars, tools that help you choose from more than 10,000 bonds -- and more than 100 fixed income specialists who will help you over the phone. Richard Carter, VP of fixed income securities at Fidelity Brokerage, says: "Our goal is to make sure that investors have a properly diversified portfolio. They need to know that there is an alternative beyond stocks and cash or money market funds. Bonds -- whether individual securities or an appropriate bond fund -- can fill that gap."
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