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Anyone here invest in municipal bonds?
Posted on 7/30/08 at 2:06 pm
Posted on 7/30/08 at 2:06 pm
I invest in stocks, mutual funds, currencies and commodities however i am looking to hedge my mutual funds with some municipal bonds. Non revenue of course. I want general obligation or whatever they are called. ANyone have any advice? TIA.
This post was edited on 7/30/08 at 2:49 pm
3
Posted on 7/30/08 at 2:29 pm to Hitman
what exactly are you looking for? Just look for a high yielding ,insured ,and highly rated muni. although you can argue that the rating is pure bullshite as are most moody and S&P ratings.
Posted on 7/30/08 at 2:31 pm to Hitman
I've been meaning to look into exchange traded muni-funds myself. Anyone have experience with these?
Posted on 7/30/08 at 2:41 pm to canuk47
quote:
Just look for a high yielding ,insured
Yep. that is pretty much it. NON-Revenue based. High Yield.
Posted on 7/30/08 at 3:06 pm to Hitman
well revenue bonds are okay also. because some of those muni bonds may be double barrell bonds which raise money by tax and revenue. just look for a large muni or country or parish and invest in one that isnt going to default. i know its only happened a few times (defaulting), but that has got to be your biggest risk here. look into a (for instance) harris county texas utilities bond or some other public works project bond.
disclaimer: the harris county texas bond was just an example. look for a large entity with lots of taxpayers and is unlikely to default
disclaimer: the harris county texas bond was just an example. look for a large entity with lots of taxpayers and is unlikely to default
Posted on 7/30/08 at 3:09 pm to canuk47
thanks man.
Posted on 7/30/08 at 5:01 pm to Hitman
If you are going long term I would stick with the GO's for safety. Think about how stressed some municipalities are these days with potentially more economic weakness to come. Don't know how much faith you have in MBIA, AMBAC and other insurers these days, that is why I would only buy GO's. Shorter duration bonds would be a more effective hedge for your holdings regarding price stability, but you obviously would get less yield.
Posted on 7/31/08 at 8:53 am to Hitman
quote:
municipal bonds?
I think sometimes muni bonds get a bad rap. They're just not cool. But if you don't have the time to thoroughly investigate the fundamentals of a stock, I've been told you shouldn't buy that either. Whatever.
We go with AAA only in $10K increments, spreading amongst a number of state and local entities. Since we live in LA, we do LA muni bonds; hence, the bonds are tax free federally and state.
Right now we're paying par (100 cents on the dollar) for 4.5 to 5% interest. However, I personally am on the sideline. I think if the market rally's, these same bonds will be available for .98 . If the market plummets to 5 year lows, I'll then go ETF's. It's a plan.
The only place I know to the bonds is through my broker, but then I don't know too much.
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