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Knowing the yield to maturity, yield to call on your bonds

Q

A recent column in the Wall Street Journal said brokers overstate the yield on municipal bonds and that 4.00% returns on a bond are an illusion. On my bond purchases from FMSbonds, I always know the yield to maturity and yield to call. I have enjoyed purchasing many bonds from FMSbonds in 2015 that pay over 4.00% and, in a few cases over 5.00%. Can you address this please?

B.A., Indiana

A

James A. Klotz responds:

We think the author confused several points and encourage you to read our new article, “Just How Smart is the ‘Inteligent Investor’?” As you know, the yield to maturity and yield to call are on all confirmations. They never change and are always known.

Nov 4, 2015

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