www.buycaliforniabonds.com I'm still looking to invest what little i have.
Buying state bonds a good idea?
- Thread starter daves66nova
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Not in an IRA. And I don't know what interest rate you would be getting. But you could do worse, for sure. For the longer term issues, they will be able to cash you out early if it is to their benefit (interest rates fall from when you bought). They will not "call" the bond early if interest rates rise. In other words, it will be the opposite of what you want.
In low interest rate environment with the prospect of increasing inflation, bonds don't seem to be such a good idea.
I would consider something like PAA outside of an IRA if you can deal with the tax learning curve, and maybe something like DMLP or SBR inside of an IRA.
In low interest rate environment with the prospect of increasing inflation, bonds don't seem to be such a good idea.
I would consider something like PAA outside of an IRA if you can deal with the tax learning curve, and maybe something like DMLP or SBR inside of an IRA.
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If I was interested in state bonds I personally would look into a no-load bond mutual fund from a major company like Vanguard that invests in state bonds. This would provide some diversity and safety.
JHZR2
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In my taxable account I'm yielding 5.7 and 6.1% on NJ muni bonds, tax free. That's like 8-9% after taxes I guess...
In a taxed investment account they make sense. In an IRA where you're already sheltered they don't.
I don't feel real good about bonds now, but I guess they're better than earning 0 interest in a savings account. What about a CD from Ally?
I don't feel real good about bonds now, but I guess they're better than earning 0 interest in a savings account. What about a CD from Ally?
My money is just sitting in savings,getting around 4-5 bucks a month on around 10,000.
I wouldn't considering CA's financial condition.
There isn't much paying out these days. MM rates and CD's are a joke.
Bout the only things moving up are stocks and precious metals. Gamble at your own risk.
Can be fun and give you a good return, but ask yourself how important that 10 grand is before going down that path.
There isn't much paying out these days. MM rates and CD's are a joke.
Bout the only things moving up are stocks and precious metals. Gamble at your own risk.
Can be fun and give you a good return, but ask yourself how important that 10 grand is before going down that path.
I seriously wouldn't be in bonds unless you actually hold them, they have a high coupon rate, and you intend to hold onto them until they mature. Either that or you're very knowledgeable about them and trade them based on interest rates.
Things like bond mutual funds and ETFs are about to get REAMED. Bond prices are inversely proportional to their market yield. We're at the lowest market interest rates practically in modern history. As rates go up, bond prices drop, and so will the value of ETFs/funds.
Things like bond mutual funds and ETFs are about to get REAMED. Bond prices are inversely proportional to their market yield. We're at the lowest market interest rates practically in modern history. As rates go up, bond prices drop, and so will the value of ETFs/funds.
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Originally Posted By: Drew99GT
I seriously wouldn't be in bonds unless you actually hold them, they have a high coupon rate, and you intend to hold onto them until they mature. Either that or you're very knowledgeable about them and trade them based on interest rates.
Things like bond mutual funds and ETFs are about to get REAMED.
Assuming that the interest rates are going to go up.
I seriously wouldn't be in bonds unless you actually hold them, they have a high coupon rate, and you intend to hold onto them until they mature. Either that or you're very knowledgeable about them and trade them based on interest rates.
Things like bond mutual funds and ETFs are about to get REAMED.
Assuming that the interest rates are going to go up.
Originally Posted By: daves66nova
www.buycaliforniabonds.com I'm still looking to invest what little i have.
As part of a diversified portfolio, bonds are part of the low risk anchors. States have been safer bond issuers in recent history.
What's the yield of the bonds you are intending to buy?
www.buycaliforniabonds.com I'm still looking to invest what little i have.
As part of a diversified portfolio, bonds are part of the low risk anchors. States have been safer bond issuers in recent history.
What's the yield of the bonds you are intending to buy?
JHZR2
Staff member
Originally Posted By: Drew99GT
I seriously wouldn't be in bonds unless you actually hold them, they have a high coupon rate, and you intend to hold onto them until they mature. Either that or you're very knowledgeable about them and trade them based on interest rates.
Things like bond mutual funds and ETFs are about to get REAMED. Bond prices are inversely proportional to their market yield. We're at the lowest market interest rates practically in modern history. As rates go up, bond prices drop, and so will the value of ETFs/funds.
I agree on holding individual bonds if possible... But sometimes the diversification is a good thing.
With Munis, it seems to me that the yields arent way down in the dumps compared to where they have ever been. As mentioned (granted it is versus NAV), Im getting around 6% on my two NJ muni funds. That is actually high as far as Im concerned, Id think that munis would be more like 2-3% yield... So unless Im missing something, it seems to me that munis are still a good way to go...
And my big assumption is that state bonds are taxed the same as munis.
I seriously wouldn't be in bonds unless you actually hold them, they have a high coupon rate, and you intend to hold onto them until they mature. Either that or you're very knowledgeable about them and trade them based on interest rates.
Things like bond mutual funds and ETFs are about to get REAMED. Bond prices are inversely proportional to their market yield. We're at the lowest market interest rates practically in modern history. As rates go up, bond prices drop, and so will the value of ETFs/funds.
I agree on holding individual bonds if possible... But sometimes the diversification is a good thing.
With Munis, it seems to me that the yields arent way down in the dumps compared to where they have ever been. As mentioned (granted it is versus NAV), Im getting around 6% on my two NJ muni funds. That is actually high as far as Im concerned, Id think that munis would be more like 2-3% yield... So unless Im missing something, it seems to me that munis are still a good way to go...
And my big assumption is that state bonds are taxed the same as munis.
I see what you're saying JH. I don't know how much risk free yields affect munis. Maybe not that much. If not, then if you can get 6% yields tax free, it's a very good investment.
Originally Posted By: CivicFan
Originally Posted By: daves66nova
www.buycaliforniabonds.com I'm still looking to invest what little i have.
What's the yield of the bonds you are intending to buy?
I don't know squat about investing,that's why i haven't done anything.
Originally Posted By: daves66nova
www.buycaliforniabonds.com I'm still looking to invest what little i have.
What's the yield of the bonds you are intending to buy?
I don't know squat about investing,that's why i haven't done anything.
JHZR2
Staff member
Originally Posted By: Drew99GT
I see what you're saying JH. I don't know how much risk free yields affect munis. Maybe not that much. If not, then if you can get 6% yields tax free, it's a very good investment.
As I recall the default rate is a fraction of a percent or maybe low single digit percentage. There are funds which are insured for a fraction Ida percent lower yield.
I see what you're saying JH. I don't know how much risk free yields affect munis. Maybe not that much. If not, then if you can get 6% yields tax free, it's a very good investment.
As I recall the default rate is a fraction of a percent or maybe low single digit percentage. There are funds which are insured for a fraction Ida percent lower yield.
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