Municipal Bond Forum
If you wouldn’t buy it, don’t hold it
Q
Since California dissolved its redevelopment agencies, issues of some cities have dropped below investment grade. On certain issues, current value exceeds costs, so common sense dictates this might be a good time to sell. Your thoughts?
A
James A. Klotz responds:
Although every situation must be analyzed independently, when the rating on any issue falls below the threshold of your investment objectives, it should be considered a candidate for sale.
Our feeling is: if you would not purchase a particular bond today, you probably shouldn’t hold it, either.
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This report is produced solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This report is based on information obtained from sources believed to be reliable but no independent verification has been made, nor is its accuracy or completeness guaranteed.