Media advice are foolish to suggest that ordinary investors buy individual corporate bonds. It makes far more sense to use a low-cost mutual fund or exchange traded fund (ETF) instead.
For a number of reasons:
You would have to purchase at least thirty to fifty different bonds to get diversification in the event of possible future defaults.
Secondly, you could never buy bonds as cheaply as a fund does. And a low cost fund’s fees would be far cheaper in the long run than your efforts.
Buy your bond funds by their duration. The duration period you choose ought to be about the same or less as your intended holding horizon. (If you are not aware of the term, duration, learn about it before you take any advice on bonds.
The dividends paid by the fund or ETF should be automatically reinvested. Periodic interest reinvestments would be very impractical with direct bond purchases. ( See the Earl J Weinreb NewsHole® comments.)
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