Bonds, Bonds, Bonds

More advice on fixed-income securities online, a radically different duck

Reviewed by Theresa W. Carey

Edited by Randall W. Forsyth

. . .FMSbonds.com, a site that specializes in municipal bonds operated by First Miami Securities, sells bonds only from its own inventory. The site offers original commentary and analyses nicely tailored to the individual municipal bond buyer. Visitors can browse their offerings and content without registering or paying a fee.

FMSbonds.com has developed the Muni-Trac that gathers the information about a client's bonds in a single report. It is especially useful for Florida residents preparing their Intangible Tax return. The downside: you have to fill out an online form and then wait for a snail-mail response.

To access FMSbonds inventory, you search for bonds of interest to you and then click on "Buy" when you find one you like. You can open an account online if you don't have one yet, but it must be funded within three days. Vice President and Internet administrator Michelle Parker will telephone you and make sure the account is properly set up. You can do all your FMSbonds transactions online, or call a representative if you prefer. . .

Excerpted from Barrons, August 5, 2002

ELECTRONIC INVESTOR

No Stock Answers
Here's a look at Websites for muni bonds and currencies

By Theresa W. Carey

Edited by Randall W. Forsyth

MUNICIPAL BONDS MAY NOT BE as exciting as technology stocks, but they are the fixed-income investment of choice for almost any individual's taxable portfolio. For instance, a triple-A 10-year muni yielding 4.05% is equivalent to a 5.88% taxable bond to an investor in a 31% federal bracket, substantially more than the 4.61% yield on the benchmark 10-year Treasury last week. No wonder households own $640 billion of munis, according to recent Federal Reserve data.

Among the various spots to research munis is FMSbonds (www.FMSbonds.com), which recently underwent a subtle facelift. You can search the firm's inventory for prospective bond purchases, and also participate in a fairly busy interactive forum. "The response to our bond forum has been overwhelming," says FMSbonds, Inc.' president James Klotz. "We get dozens of e-mails a week that are quite interesting and we'll post the message, and our response, if we think the subject matter might help somebody else." The messages don't get posted immediately, but go up after the topic is reviewed and answered. Most responses are written by Klotz, who says he's found that the forum prompts interest from other investors.

The site lets you search through the dealer's current holdings, and buy directly from its inventory. FMSbonds, Inc. is heavily involved in the secondary market, buying bonds from investors and then reselling them. You won't find new issues here, but Klotz assures us that the company's staff of tax-free bond specialists strives to offer only bonds that would work for individual investors. "Since we own the bonds we sell, we do extensive research before we buy them for our inventory," Klotz asserts. "When a bond dealer is carrying bonds from an aggregator such as BondsExpress, he can't answer many questions since most bonds in their inventory are actually held by other brokers."

Klotz remarked that the profile of his site's customers is changing dramatically. In the past three years, FMSbonds, Inc. has attracted younger customers who have had experience trading equities. "Most of the questions on our forum are coming from people who haven't had much bond-buying experience," he says. "Our new customers got a rude lesson and now understand risk. They know that some portion of their portfolios should be in fixed-income. If they have any kind of tax-bracket considerations, then they understand why they should hold munis."

When you first navigate the site, you'll find several featured bonds, plus a menu-listing on the left that gives you access to the current inventory, industry commentary, and investing strategies. You can sign up for e-mail updates for FMSbonds, Inc. inventory holdings, or click on "Bondfinder" and search what's currently available. . . .

Excerpted from Barrons, September 8, 2003