municipal bonds

[isuno1fan]

For those of you that own muni's are you selling or hanging on for the long run?

Just curious...I have 6 of them that are all about 6yrs old that don't mature for another 12-15yrs. Of course 4 are from Ill and 2 from Cal....probably the two worst states to hold bonds in...LOL.

Haven't decided myself what I'm going to do. Hard to believe the Feds will let mass defaults happen, but who knows??

 

[dmclone]

Have you been watching 60 minutes?

 

[keepngoal]

someone just finished watching 60 minutes.

-keep

 

[IcSyU]

Ahhh yes...December 19th, 2010...the day isuno1fan asked what people were doing with their muni bonds. :wink:

 

[cyson]

Ahhh yes...December 19th, 2010...the day isuno1fan asked what people were doing with their muni bonds. :wink:

It was a Sunday. Well played.

 

[isuno1fan]

You bet...60 mins got me with the scare tactics. What say you?

 

[cdekovic]

Why would you have munis anyway? Are you in that high of a tax bracket? Retiring soon?

 

[usedcarguy]

I watched the segment as well. My take on government bonds is that there is a lot of economic value in the ability to tax, so with governments having that ability, their situations aren't as dire as they seem. That doesn't mean that they aren't going to get hammered in the marketplace, or that there won't be people who don't get their money when promised, but imo all will at some point be made whole. Of course there's a lot more economic value to owning a press that prints money, but that's another story...

 

[jmb]

For those of you that own muni's are you selling or hanging on for the long run?

Just curious...I have 6 of them that are all about 6yrs old that don't mature for another 12-15yrs. Of course 4 are from Ill and 2 from Cal....probably the two worst states to hold bonds in...LOL.

Haven't decided myself what I'm going to do. Hard to believe the Feds will let mass defaults happen, but who knows??

This is like asking: hey you going to keep your car since GM sucks donkey ****?

Issuer, reason for purchasing, source of rev etc are much more important question.

**** 60 minutes. You better have purchased for a reason not because you saw it on a show.

jmb

p.s. i have specifically spelled out all words and the filter didn't catch.

 

[isuno1fan]

Why would you have munis anyway? Are you in that high of a tax bracket? Retiring soon?

I bought 6, $25k muni bonds that mature when my daughter is 18-23. Liked the idea of using them to pay for her college (also have a 529).

 

[Bobber]

I think it's a poor time to own bonds. Interest rates only really have one way to go which is up and that is not good for bonds.

 

[delt4cy]

What's the ytm and coupon? Also, what types of munis are these? Did you lend to a far flung ex-burb in the Inland Empire of Cali to build roads/schools?

Depending on the above, I'd hold to maturity since you'll get par back (barring a total collapse). If you were to sell right now you'd probably get whacked on the price and no individuals out there will produce anywhere near the same yield if you were to reinvest in bonds. The alternative is to move to equities which may be a good move if you diversify appropriately.

 

[isuno1fan]

What's the ytm and coupon? Also, what types of munis are these? Did you lend to a far flung ex-burb in the Inland Empire of Cali to build roads/schools?

Depending on the above, I'd hold to maturity since you'll get par back (barring a total collapse). If you were to sell right now you'd probably get whacked on the price and no individuals out there will produce anywhere near the same yield if you were to reinvest in bonds. The alternative is to move to equities which may be a good move if you diversify appropriately.

Bonds were purchased 6yrs ago...no way in heck I would buy them now. I've owned them for some time.

Here is a list of the bonds I own:

CORONA-NORCO CALIF UNI SCH DIST G/O SER C ZERO CPN
MC HENRY & KANE CNTYS ILL CMNTY CONS SCH G/O ZERO CPN
COOK CNTY ILL G/O SCH DIST#159ZERO CPN C/A
KANE MC HENRY COOK & DE KALB CNTYS ILL CAP APPREC
MADISON & JERSEY CNTYS ILL CMNTY UNIT
SANTA MONICA-MALIBU UNI SCH DIST CALIF G/O ZERO CPN C/A

3 are 15k maturity and 3 are 20k maturity. They mature between 2019 and 2023 respectively. Once again, the thought was as my child is in college, one or more of these would mature during that timeframe to help pay for the education (along with the 529 fund).

Probably going to just hold them as they would be tough to sell right now as mentioned. Won't make or break me by any means if they default, but never like seeing that kind of cash go by the wayside.

 

[erikbj]

Bonds were purchased 6yrs ago...no way in heck I would buy them now. I've owned them for some time.

Here is a list of the bonds I own:

CORONA-NORCO CALIF UNI SCH DIST G/O SER C ZERO CPN
MC HENRY & KANE CNTYS ILL CMNTY CONS SCH G/O ZERO CPN
COOK CNTY ILL G/O SCH DIST#159ZERO CPN C/A
KANE MC HENRY COOK & DE KALB CNTYS ILL CAP APPREC
MADISON & JERSEY CNTYS ILL CMNTY UNIT
SANTA MONICA-MALIBU UNI SCH DIST CALIF G/O ZERO CPN C/A

3 are 15k maturity and 3 are 20k maturity. They mature between 2019 and 2023 respectively. Once again, the thought was as my child is in college, one or more of these would mature during that timeframe to help pay for the education (along with the 529 fund).

Probably going to just hold them as they would be tough to sell right now as mentioned. Won't make or break me by any means if they default, but never like seeing that kind of cash go by the wayside.

why don't you call your financial advisor and have him get some bids for you.....if the bonds are not in danger of defaulting (you have G/O's, so you should be ok), they should be valued pretty high being zero coupons. You may want to look at selling them now and taking the profits. If/When rates rise, you could see some sharp declines.

If you have the CUSIPs, you can look up where the bonds have been trading on Investing In Bonds

 

[brianhos]

What rates do you get with muni's?

 

[delt4cy]

If you are confident they won't default, (I highly doubt the risk is too high with these school district bonds), then interest rate hikes won't matter if you hold to maturity. You will get par value back.

The problem with selling is what to do with the proceeds? You want to earn yield but current yields are so depressed it may not be worth just to protect from default risk. Especially today's yields vs. 6 years ago.

Looking out to 2019-2023 in the Muni space you can pick up Munis with Coupons from 3 to 3.75. Compare that to your Ytm. Corps are out there from 4.25 to 4.75. **Aa credit

If you pm your cusips I can see if they'd sell at a discount or premium right now. Otherwise the above link should be good too-

 

[isuno1fan]

Hos....They all yield about 5.25-5.50%