FMSbonds, Inc.’s Municipal Bond Forum is an exclusive opportunity for investors to submit questions and comments on the bond market or to respond to one of our articles.
To participate, just send us an e-mail. Be sure to include your name or initials and your state of residence. Posted e-mails may be edited for length and clarity. If you prefer a private response, please note that in your e-mail. Responses are provided by James A. Klotz, president and co-founder of FMSbonds, Inc., a municipal bond specialist for more than 35 years, and other members of the firm as noted.
Postings are listed by date. If you have any questions, please call us at 1-800-367-2663 or e-mail us.
I’m not sure if you’ve specifically addressed this already, but I am interested in knowing which muni-bond categories are the safest. A recent article in Smart Money suggests General Obligation bonds are the safest, but then goes on to say “bonds backed by water or sewer fees” (revenue bonds) “are usually safe.” I’d like to know which categories to avoid.
S.D., Connecticut
I just read an article about how employees from the leading credit rating agencies knew about the dangers in subprime mortgages but gave them the seal of approval anyway. I find this distressing. They rate the bonds, and if they can’t be trusted, what good are their ratings?
D.W Phd., California
Will any of the new taxes in the just-passed healthcare bill have potential impact on the income from municipal bonds?
K.F., Ohio
Assuming interest rates stay steady, do you think muni prices will rise when tax rates rise?
B.W.
Barron’s painted an alarming picture of municipal bonds. What are your thoughts?
A.B., Florida
I own a Pembroke Pines (FL) GO bond. In a small community like that, does the fact that it’s a GO vs. a revenue bond mean anything?
S.M.
As the market falls below 10,000, I do an exercise you may want to pass along to other FMS customers: Each morning I bend over, kiss my behind and thank the almighty I have tax-free bonds.
L.S.,Texas
Since the federal government is guaranteeing some of the interest on Build America Bonds (BABs), is it also guaranteeing the principal?
H.B., Maryland
As a rank amateur, I’m trying to decide whether to take my money out of the Vanguard high-yield tax-exempt bond fund and buy a bunch of individual municipal bonds as a ladder for the next five years. According to my interpretation of your writings, perhaps I should just stay put. Any comments?
J.C.
I’m a 65-year-old retiree who has been in the tax-free bond market for the past two years and wish I had done it long ago. Peter Jacobs, my bond specialist at FMS, has always gone above and beyond to make sure that I understand what I’m buying and has helped me tremendously. I manage my own money and buy what I’m comfortable with. Hat’s off to FMS and thanks again for making a believer out of an “Old Soldier.”
D.H., Florida
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