Municipal Bond Forum

FMSbonds, Inc.’s Municipal Bond Forum is an exclusive opportunity for investors to submit questions and comments on the bond market or to respond to one of our articles.

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.

Plans to aid cities and states

Unless Congress sets aside at least $200 to $300 billion to help states, they will start to default and many other problems will follow.

Your thoughts?

Supporting the municipal bond market

I hear the Feds are going to assist the municipal bond market with $500 billion or more of purchases.

Has it happened yet?

Financial stress on cities and counties from pandemic

Today there was a front-page piece in the newspaper about financial stress cities and counties are facing due to lack of revenue caused by the pandemic fallout.

Should I be worried about them defaulting on bonds or failing to make interest payments?

Effects of coronavirus (COVID-19) on the muni bond market

What are your views of the municipal bond market in the wake of the coronavirus (COVID-19)?

Reinvesting muni bond redemptions

I read your recent article about the significant rise in muni prices (“Muni Market Returns Rise Amid ‘Gluttonous’ Demand”).

My muni portfolio has done very well.

But even though prices have gone up, reinvesting redemptions at 1.5% yield-to-worst isn’t very attractive.

Since you frequently state that the main purpose of municipal bonds is to generate a stream of tax-free income, it doesn’t seem too lucrative.

In hindsight, your advice to invest in long duration municipal bonds was a great strategy.

What are your thoughts for new investors or someone whose portfolio is having a lot of calls and maturities?

Muni bond funds vs. individual bonds

What are the pros and cons of muni investment using mutual funds vs. individual issues?

Do longer-term muni bonds make sense?

I'm 71 years old and looking to invest in municipal bonds. Should I still look at long-term muni bonds?

Should Have Stuck To Experience And Avoided Bond Laddering

You are spot on with your article, “Today’s Market Especially Cruel to Bond Ladders.” Unfortunately, I did fall for the short-term trap in 2016 when I bought corporate bonds. I rolled over an IRA and felt yields were on the low end of my range so I committed 70% of my capital to bonds maturing in 12 to 20 years and deployed the other 30% in a three-year, short-term fixed annuity. I thought yields would be higher in 2019 than in 2016. Now I have those funds at my disposal but yields have fallen below the level I’m comfortable with. I should have stuck with my 30 years of experience with munis and just committed my funds as they were available. Trying to predict the future direction of rates often ends badly!

We Know Where Muni Rates Are Going, So Why Not Build A Bond Ladder?

I read with great interest your concerns about bond ladders, “Today’s Market Especially Cruel to Bond Ladders.” However, if long-term muni rates are about 3.00%, but today are only about 2.00%, then putting a portion into a ladder makes sense if you’re starting a long-term program today using a current lump sum. If, for example, one assumes that rates would start rising in five years then gradually plateau five years after that, wouldn’t it make sense to allocate some portion of the amount to a ladder between five and 10 years and the rest to an immediate commitment to a very long-term maturity, like 40 years? The main decision then would be the percentage allocated to the ladder portion.

Caution on Tobacco Bonds

You had an article awhile ago on tobacco bonds (“Better News Ahead for Tobacco Bonds?”) and I was wondering how they are doing. I am 76 years old and interested in income.
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