Municipal Bonds 10/11

Here are a few “bullets” from this interesting meeting:

  • The bond market is relatively inefficient resulting in prices that are negotiable.
  • Because of the fluctuations in interest rates, it is best not to hold bonds to maturity.
  • “Laddering” is a good strategy to reduce interest rate variations and have a more steady return.
  • Managed bond portfolio is usually better than a bond fund because;
  • It can be tailored to individual needs.
  • Fees are lower than a fund.
  • Difficult for individuals to do efficiently.
  • Due diligence, and research
  • Ability to negotiate price with large volume
  • Although the tax exempt status of muni’s has been questioned, it probably won’t change.
  • The larger the municipalities the better. –Lower default rate.
  • Revenue bonds are usually safer because income streams finance them.
  • Rating agencies are usually fairly accurate.
  • Rates are expected to be flat for two years.
  • org (Municipal Bond Rule Making Board) for more information.

Guest Speakers:   Charles Riopel, Charles Schwab, (603) 430-6237 charles.riopel@schwab.com     Scott Baughman, Gannett Welsh & Kotler, LLC, Investment Mgt.      (617) 236-8900,      sbaughman@gwkinc.com

 

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