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Glen Rosenberg  

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  • BBB Munis Are Safer Than AAA Corporate Bonds? Yes - Seriously! [View article]
    I'll see what I can do to find it for you. A quick search on google didn't yield any results. I have a hard copy of it...
    Oct 30, 2012. 01:00 PM | Likes Like |Link to Comment
  • How The Smart Money Gets More Income With Tax Free Municipal Bonds [View article]
    Pretty simple WmHilger1,

    Puerto Rico bonds are triple tax exempt. Meaning, you could live in a state that has state income tax and receive your bond income free from both Federal income tax as well as your state's income tax.

    Oct 30, 2012. 12:53 PM | Likes Like |Link to Comment
  • Using Municipal Bonds For Growth? [View article]
    That's a good point rl1856. I agree.

    For me personally, it's not 100% logical. It's also part emotional. In other words, I like simply knowing that I have a significant amount of passive income coming in every year in addition to my earned income. Just kind of makes me feel warm and fuzzy. And there's some value in that.

    Of course, you could always sell your zeros and convert them into coupon paying munis at any point. However I just prefer it this way.

    But again, good point...
    Oct 30, 2012. 12:50 PM | Likes Like |Link to Comment
  • How The Smart Money Gets More Income With Tax Free Municipal Bonds [View article]
    Hi WmHilger1,

    Keep in mind, investing in munis achieves a completely different objective than investing in the other classes you just mentioned.

    For example, individual munis have a maturity date that returns the principal to the investor at some future point. While MLPs and REITs, etc. may offer more yield currently, they are certainly more volatile, many are taxable in some form, and they do not provide the return of principal at a maturity date.

    It's important consider two things:

    1. The ROLE that munis would play in your overall portfolio.
    2. They are tax free.

    With the likelihood of rising taxes in 2013 on both income and investment income, the comparable yield of munis becomes far more attractive when compared to other alternative income based investments exposed to ordinary income tax.
    Oct 30, 2012. 12:43 PM | 1 Like Like |Link to Comment
  • PIMCO's Old And New Bets: Should You Replace Treasuries With Munis? [View article]
    Terrific article Michael.

    Muni bonds are actually very cheap relative to treasuries currently (as of today, October 29th, 2012).

    Munis historically have traded at a yield of approximately 85% of their comparable maturity treasury.

    Today muni yields are HIGHER than treasury yields AND they are tax free!

    The 30 year treasury is around 2.9% taxable compared to a new 30 year AAA rated state general obligation bond which is yielding around 3.5 - 3.75% tax free.

    Munis departed from their traditional relationship with treasuries a few years ago around the time of the financial collapse. This was a result of the Fed's involvment in buying treasuries as well as the compounding of the difference by very large safe haven investors.

    Muni bonds are great as a higher yielding safe haven for individuals, but not when you are looking for a home for $300 - $500 million at a clip.

    Issues this size aren't readily available every day. And if you want to turn around and jump out real quick, good luck finding a bid on $500,000,000 in munis! Not many bidders at that level.

    But there's plenty of bidders at the $50K and $100K levels. So it's really ideal for individual investors.

    Check out the article I wrote on building the Ideal Municipal Bond Portfolio:

    I strongly believe building your own individual bond portfolio is far better than buying a bond fund.

    I'll write an article on that subject as soon as I have a chance...

    Again, great article Michael. Keep 'em comin'!

    Glen Rosenberg
    Oct 29, 2012. 01:29 PM | Likes Like |Link to Comment
  • The Best Long-Term Non-Junk Bond Investments [View article]

    I find your analytical approach to be helpful. Thanks for the article.

    I feel strongly that individual investors with at least $100K to invest or more in bonds are far better served in individual bonds than in funds.

    Even more important than avoiding the various expenses of the funds which reduce the net return to the investor like you mention above, having a maturity date on the end of your bonds as opposed to an open ended investment is a very significant fundamental difference - especially in a low interest rate environment like we are in today.

    The greatest risk to bond funds today is clearly rising interest rates.

    Without a maturity day to rescue your principal, investors in funds take significant risk for very little return.

    I don't really like the risk to reward ratio on that bet.

    Additionally, investing in individual muni bonds we can achieve higher yields. I've been getting around 3.5% tax free in investment grade rated bonds 10 years and less in these last 4 months (as an example).

    I would check out my article on how to Build The Ideal Municipal Bond Portfolio. I think you might find it helpful:

    Thanks again for the article Kurt and keep 'em comin'!

    Oct 29, 2012. 01:29 PM | Likes Like |Link to Comment
  • There Be Dragons: Navigating Bond Allocation Through Seas Of Rising Interest Rates [View article]
    Great article Bard.

    The extraordinary yield spread between munis and their comparable maturity treasuries represents a phenomenal opportunity today.

    It has more to do with safe haven investing on a large scale than many individual investors understand.

    You or I can buy $50K face amount of bonds and turn around and get a bid shortly after that's very close to our cost (given a flat market).

    However, even though munis are currently yielding more than their taxable treasury counterparts, large international institutional sized investors might be interested in putting away a quick $500,000,000, but good luck to them trying to find an issue readily available at that size, let alone a bid to sell it.

    The muni market just isn't a good fit for their investing objectives.

    This is a large part of the reason for the big spread in yields between munis and treasuries.

    Treasuries are traded far more often and in far larger quantities.

    There's just not many players at that level in the muni market since typically less than 1% of the muni market trades hands on the secondary market in any given year.

    So, while not ideal for giant institutional investors, munis definitely are ideal for individual investors interested to take advantage of those extraordinarily wide yield spreads between munis and treasuries.

    Thanks again for the article. Keep 'em comin' Bard!

    Oct 29, 2012. 01:29 PM | Likes Like |Link to Comment
  • 5 Quality-Rated Tax-Free Municipal Bond ETFs [View article]
    As a municipal bond specialist, I completely agree with a lot of the suggested ETFs in this article. Bravo to the author.

    Whether you are investing in munis via ETFs or using individual bonds, there are a number of risks that are very relevant to this specific investment. It's important to build your portfolio in such a way that it maximizes your income and simultaneously is structured to protect against these various risks.

    This brief video demonstrates how to build the ideal municipal bond portfolio:
    Oct 26, 2012. 10:49 AM | Likes Like |Link to Comment
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