Take a look at the corporate bonds in your portfolio. A realclose look. Are you wed to everything you hold? Are there any bondsyou feel are missing?

With summer approaching fast in the U.S., your window ofopportunity to cull the unwanted and buy the securities you desirewithout the hassle of having to scour the market for a counterpartyis about to close.

The traditional June-to-August slowdown in trading is becomingmore pronounced after Wall Street stopped using so much of its ownmoney to facilitate transactions. Bond dealers have becomeincreasingly reliant on new debt sales to spur activity—and thosetypically evaporate during the U.S. summer months.

So it's either trade now or run the risk of being stuckwith what you have until colder weather brings traders back fromthe beach and the golf course.

“We recommend investors focus on realigning the portfolio in theupcoming weeks, while the liquidity window is still wide open,”Wells Fargo & Co. credit strategists George Bory and NathanielRosenbaum said in a May 9 report. As trading becomes more focusedaround new issues, “seasonality has increased, with the summermonths being perennially illiquid.”

Their advice underscores a growing concern among investors thatthe ability to maneuver in a ballooning debt market may simplyvanish one day, especially as Wall Street dealers curtail theirmarket-making role. That flexibility often disappears wheninvestors need it most, such as when they're receiving bigwithdrawals. So the worry is particularly poignant given thatdemand may shift away from the bond market as the Federal Reservepulls back on its stimulus.

Record Sales

Now that higher capital requirements and new regulations haveled banks to retreat from using their balance sheets to helptrading, new bond sales have increasingly become the main forcebehind activity since the 2008 credit crisis.

New issuance ignites volumes in part because funds sell holdingsto make room for new securities. More than five years of near-zerointerest rates from the Fed have helped spur about $7 trillion ofdollar-denominated corporate debt sales.

Bond offerings have been met by feeding frenzies of investorsseeking riskier assets, who've been tripping over each other to buyand are largely unwilling to sell once they've gotten a piece.

Yet even with the record sales, trading has been relativelyflat. Investment-grade bond-trading volumes have averaged about $3trillion of transactions during each of the past four years, eventhough the amount of debt outstanding has surged by about 54percent, according to MarketAxess Holdings Inc. and Bank of AmericaMerrill Lynch index data.

And now that the sun is out, corporate treasurers are about tohead out to work on their golf games. Last June, company-bondissuance in the U.S. plunged 65 percent from the month earlier,after dropping 26 percent during the same period in 2012, accordingto data compiled by Bloomberg.

Trading dropped 3 percent last June from May even as mountingwithdrawals from bond funds forced managers to sell. The yearbefore, it fell 8 percent, according to data from the FinancialIndustry Regulatory Authority. This doesn't bode well for investorswho want to reshuffle their portfolios in a few weeks.

So, there is a time to sell, and a time to buy. Now may be thetime to do both.

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