Municipal Bond Forum
Going long with no worries
Q
Your message (“The No. 1 Sin of Muni Investing“) is right on. My friends always ask me why I hold long paper. I tell them I have consistent returns of 5.00% and no worries.
A
James A. Klotz responds:
As you know, we have always encouraged municipal bond investors to buy long-term bonds to maximize their income and avoid the flawed strategy of laddering.
Investors with shorter-term laddered portfolios have experienced the frustration of continually being forced to reinvest at lower and lower rates for the last few decades. As a result, they have sacrificed 40% to 50% of available tax-free income on each purchase. Also lost are the additional dollars available for reinvestment.
I trust that a quick glance at your portfolio will change your friends’ approach to muni investing.
Start here.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
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.