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Robert Rex
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This blog is written by Robert H. Rex, Esq. who is a securities attorney and a passionate advocate for investors rights. With over 30 years of legal experience, 25 of which have dealt almost exclusively with the recovery of stockmarket and investment losses for mostly elderly clients, he and his... More
My company:
Rex Securities Law
My blog:
Rex Investment Loss Recovery Blog
  • SEC Issues Investor Bulletin On Municipal Bonds  0 comments
    Mar 20, 2012 4:22 PM

    On March 19, 2012, the Securities & Exchange Commission issued an Investor Bulletin to help educate investors on Municipal Bonds.

    Municipal bonds (muni's) are debt securities issued by governmental agencies like cities & counties, often times to fund projects like building schools and highways.

    There are two common types:

    General Obligation Bonds which are not secured by any specific assets, but rather are backed by the issuer (ie; state, county, etc.)

    Revenue Bonds which are backed, not by the government entity but by revenues from a specific project like highway tolls.

    The SEC points out that muni's are subject to the following risks:

    · Call Risk-the potential for the issuer to repay the bond before its maturity date.

    · Credit Risk-the risk that the issuer may experience financical problems that may it difficult or impossible to pay the promised interest.

    · Interest Rate Risk-the risk associated with the fluctuation of the value of the bond in response to rising and falling interest rates.

    · Inflation Risk-If prices move up generally, this can lead to rising interest rates which lower the value of bonds.

    · Liquidity Risk-the risk that investors will not be able to find a market for their bonds.

    If you are thinking of investing in municipal bonds, you would be wise to read the entire Investor Bulletin on the SEC website.

    If you have questions about the way your brokerage account is being handled or have unexplained losses in your stock market account, please do not hesitate to contact us at 561 391 1900. We have been helping investors nationwide recover stock-market and investment losses for over twenty years.

    Visit our securities law website at RexSecuritiesLaw

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