ONCE YOU'VE LEARNED about bond basics and reviewed the vast number of bond choices, you're ready to make decisions on how to invest your funds in bonds. Basically, you have two choices: you can purchase individual bonds or buy them packaged together as funds.

When you purchase individual bonds, you get to select the specific characteristics of the bonds that you wish to own. The question, of course, is how do you, buy them? you can purchase Treasury debt and U.S. savings bonds directly from www.treasurydirect.com or from many commercial banks. Or you can check out sources of information on the Internet for municipal and corporate bonds before talking to brokers.

We describe the ins and outs of buying bonds through the Internet, purchasing them newly issued or previously owned. When they come due, they will automatically come due at their face value. Pay once to buy them and enjoy them until they reach maturity. We suggest Web sites to look at and ways to deal with brokers so you can get the best bang for the buck.

Alternatively, you can purchase bonds that are packaged together in a variety of forms. Funds provide safety through diversity in riskier market segments but never come due. Open-end mutual funds are the most generic type, with a variety of closed-end funds carving out market niches of which the exchange-traded fund (ETF) is the new kid on the block. There are a lot of bond funds out there, and their price quotations fill columns of small type in newspapers across the country and are updated daily on the Internet. Many are hard to find because they are listed among fund families that include stock funds as well. And once you find a bond fund, it's often difficult to understand exactly what it invests in. This section of the book clears the information fog surrounding these financial instruments and describes the composition of more than twenty different types of funds.

We explain the advantages of funds, when to use them, how to evaluate them, and how to size up their fees. Find out how the concept of yield for funds differs from yield-to-maturity used for individual bonds. Learn about duration, total return, and other measures of the payout from funds. See how open-end mutual funds compare to closed-end funds (including ETFs) and individual bonds in ways that might matter to you. We explain all this and more in this section.

Learn how to find great bond funds by using mutual fund selectors, and use calculators provided by Web sites to compare returns on different funds. Discover the advantages and disadvantages of all the different bond funds. Find out where to locate offering statements and more. You can profit in the bond markets, and we provide you with the tools and information you need to do so.