In the December 8, 2003 issue of Forbes [link no longer working], Daniel Kruger discusses how investors can now buy bonds directly and avoid funds. Recently added direct-access programs by Incapital, Merrill Lynch, and LaSalle Broker Dealer now allow for investors to access 28 companies that want their debt in the hands of individual investors. The significance of this is that the mark up / commissions for bonds typically can eat up 0.25% to 3% of the principal. By buying direct, the yield is less than what institutions see in the o-t-c market but have significantly reduced fees. The cost of transaction is reduced to an average of $10 per $1000 bond, allowing for easy bond portfolio diversification and transaction fees similar to stocks.