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re: Municipal Bonds........

Posted on 2/21/10 at 2:30 pm to
Posted by Fat Man
Gotta Luv Cov ... ington
Member since Jan 2006
7061 posts
Posted on 2/21/10 at 2:30 pm to
quote:

bought many of those when prices were down


this is true, but regardless of whether their value goes up or down, I still get the interest at a constant rate.

quote:

trading at a premium to face value


Yea, I've stopped buying .. but if the OP doesn't have any, he might:

quote:

hold fixed income to reduce the overall volatility of 'his' portfolio


quote:

7-yr AAA GO is trading with yield of 2.26%


I'd go w/ the higher yield Muni.

quote:

buying a 7-yr 3.5% CD


quote:

my portfolio and tend to stay on the shorter end


3.5% CD sounds good to me; 7 yr doesn't.

Posted by tirebiter
7K R&G chile land aka SF
Member since Oct 2006
9385 posts
Posted on 2/22/10 at 9:18 am to
quote:

3.5% CD sounds good to me; 7 yr doesn't.


The beauty of it is, especially if someone was choosing a bond fund, is you can break the CD and not lose principal after 3-6 months depending on the agreement, and reinvest at higher rates. Try to do that with a bond or bond fund and you will lose money, especially on intermediate to longer term bonds.

30-yr TIPS are auctioned today, will have to see what the rate ends up at, I am not buying any regardless.
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