1-800-367-2663
1-800-367-2663
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-FMS-BOND (1-800-367-2663) or e-mail us.
Net asset values of muni bond funds have dropped these days. I know I shouldn’t look at day-to- day market fluctuations, but with the $700 billion bailout coming, its potential drag on the economy and with bond insurers in trouble, I wonder if muni bonds or bond funds are still a good investment?
D.O., California
Do you think Lehman Brothers will survive its present problems? What is its responsibility to the bondholders in case of a sale of the company? Will the bondholders eventually be made whole? Is there any protection in case of a default by Lehman?
B.P., Florida
I appreciate your article. Because I own several businesses and am in a high tax bracket, I’ve looked at munis. I’m not a speculator, so I didn’t leap at opportunities when MBIA and Ambac were downgraded. I, too, foresee a rise in taxes and see no bounce in interest rates as in the era of “stagflation.” I think the “wage” component of the “wage-price spiral” has been wiped out. I am looking at a three- to five-year investment horizon. As an investor in Treasuries, what do I do? I’m losing principal to inflation.
H.H., California
Can you sell bonds at anytime or do you have to hold on to them until maturity?
D.D.
Where do you think mortgage rates are headed?
V.W.
Why has the rating of my municipal bond, Massachusetts St. Dev. Fin., CUSIP 57583fzx2, gone from “AAA” to “A-“?
C.S., Florida
I am heavily invested in Ohio tax-free municipal bonds. My huge open-ended bond fund went from being 100% “AAA” insured to 80% “AAA” insured, but because of recent negative news surrounding bond insurers, my fund will suffer yet another hit. How safe are these investments today, without the insurance, given the economic outlook for my state?
B.A., Ohio
Over the past week, the NAV of my California municipal bond fund (FRCIX) has been going down. I am OK with the ups and downs and I recognize that I am in it for the income. However, is there anything specific going on this week causing the fund to drop so much?
V.C., California
It looks like a lot of things are going on with bond insurers. What are your views on Ambac and MBIA? Can they survive this turmoil? What does the future look like?
D.O., California
Do all Texas independent school districts carry the backing of the permanent school fund, i.e., AAA?
P.W., Texas
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