Planning to make my first investment on BondScanner this week. Have been browsing deals but honestly everything looks similar after a point. What are the 2 to 3 things I should actually focus on before investing?
yeah i see AA, AA+ etc but not sure how much that actually matters in practice
Credit rating is the first filter worth taking seriously. It reflects the rating agency’s assessment of the issuer’s ability to repay. Higher rating means lower default risk, but also slightly compressed returns. The tradeoff is explicit and intentional, not accidental.
tenure
don’t lock money for 2 to 3 years if you might need it before that
yeah that part i’m genuinely unsure about. don’t know how to think about it
Think about it in terms of matching your investment horizon rather than chasing a number. If there is any chance you will need this money before maturity, either pick a shorter duration bond or be very clear with yourself that you are committing to hold without touching it. Bonds are not liquid in the way a savings account is.
that framing helps actually. and what about yield? should i just pick highest?
okay fair. but why not
Yield is not a standalone number. It reflects risk. If something is offering significantly more than comparable bonds, the market is pricing in something you should understand before putting money in. Higher yield for lower rated issuers is compensation for taking on more credit risk. It is not free money.
don’t chase the top number on the list
that’s how people end up confused when something doesn’t go as expected
okay so rating, then tenure that matches my needs, then yield in context of those two. is that roughly right?
That order works well. One more thing worth adding before you buy – check payout frequency. Some bonds pay quarterly, some semi-annually, some annually. If you are expecting regular cash flow and the bond pays differently, it can catch you off guard the first time.
oh i didn’t even think about that. assumed it would all be the same
yeah first payout surprise hota hai 
everyone goes through it once
haha noted. okay this actually helps a lot. rating, tenure, yield in context, payout frequency. will check all four before investing this week
I’ve been a fan of NBFCs first off. Or a big brand like say Adani / IIFL. That’s my first filter.
Then I look at ratings and tenure to get a quick sense from a comfort standpoint. This way I’m able to choose what HTM I’m ok with. I assume there is no liquidity in bonds hence I choose HTM point of view.
Last thing is ticket size. This is important since I know how much I have to invest but being retail, I’ll do smaller tickets like 20-30k.