| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 718.1 | Questions | KOALA::BOUCHARD | The enemy is wise | Tue Apr 26 1994 21:24 | 4 |
| A tax free bond fund lost money last year? Seems odd, unless NY is a
very special case.
What is a "global muni"?
|
| 718.2 | Sarajevo's got some neat ones too | CSC32::K_BOUCHARD | | Wed Apr 27 1994 14:23 | 8 |
| .1� What is a "global muni"?
Must be a bond fund that invests in "municipal bonds" from all over the
world. I understand Chernobyl had some really interesting issues back
in the "eighties".
Ken
|
| 718.3 | I must be missing something | NOVA::FINNERTY | lies, damned lies, and the CAPM | Wed Apr 27 1994 14:52 | 10 |
|
re: .-2
I'm not sure that makes sense. A municipal bond will offer a lower
pre-tax yield because there is a clientele for that bond that will
buy it because it offers better after-tax yield. If you're not in
the municipality, you're not part of that clientele, and you just
get lower yield.
/?
|
| 718.4 | lost money! | WMOIS::ZEINER | | Thu Apr 28 1994 10:43 | 2 |
| how with a tax free bond did you loose maney whan it pays a cupon
return guarenteed
|
| 718.5 | Easy to lose money with bonds | KOALA::BOUCHARD | The enemy is wise | Thu Apr 28 1994 12:10 | 13 |
| re: .4
It's easy to lose money with a bond, of any type.
If you buy a bond when issued, hold to maturity, and the issuer of the
bond makes all required payments, you earn a specific rate known when
you bought the bond.
But it you buy a bond after the initial issuing, or sell before
maturity, or if the issuer doesn't honor their obligation, or if you
buy into a bond mutual fund (which has bonds of lots of types with
different purchase dates and maturities) you can have a gain or loss
depending on various market forces, especially interest rates.
|
| 718.6 | CHOICES GALORE.....WHAT'S YOUR RISK TOLERANCE??? | POBOX::PATEL | | Fri Apr 29 1994 03:02 | 33 |
| re: .5 is correct.
The bonds are bought and sold in secondary markets. Mr Buyer either
bought a particular bond or a Muni Bond Fund. This means that when the
interest rates move up, Muni Bonds and Funds take a hit. If you look
at the bottom line on the Fidelity statement, it will show the
depreciated value. Well that much for reasonings.
What to do now is an entirely different question?.
Ask yourself why you bought these bonds in the first place. What was
your goal and your time frames and do you need this money right now?.
Depending on your answer a lot of choices can pop up such as:
1. Move it into a shorter term muni bond OR
2. Move it into a shorter term muni bond fund OR
3. Move it into something more aggressive to get back your money (need
nerves to do this) OR
4. Sit tight and keep receiving the income you are receiving - while
taking a risk that if rates move up further (which they will) the value
of the bond or the fund will depreciate more
I know I can keep going, but I'll let you give more input before WE ALL
CAN GIVE MORE SMART CHOICES to your situation.
I myself am eyeing the JUNK BOND *FUNDS* to get into (as I have many
times and exited many many times - making money each time!) as one of
the best alternatives out there.
Good Luck
Ken
|