Municipal Bond Forum
After selling, ready to re-enter muni market
Q
I sold $1.2 million in various AAA munis in the last four months. I bought at the bottom and my capital gains equaled three to four years of interest. I had to take it before taxes rise; now I’m waiting to get back in. I’m less than thrilled with picks from my bank/brokerage and their lack of knowledge. They put me in high risk bonds without telling me. Is there a fee to open an account with you? Can I trade munis? Are you an order taker, or do you give advice? I am 46, and have never been more fearful about all markets.
A
James A. Klotz responds:
Although we are pleased to hear you have produced substantial gains with your bonds, we are not a firm that believes in trading municipal bonds for capital gains.
We think bonds should be purchased for income and always recommend a “buy and hold” strategy, unless there is a tax advantage to be gained by a bond exchange.
We assist our clients by helping them select bonds that pay a steady rate of return, while enabling them to feel comfortable with their investments.
We have never seen anyone accurately predict the future direction of interest rates for any sustained period of time, and with fixed income investing, being out of the market for any length of time can become costly, particularly when you guess wrong.
All prices on our website are net to the investor. There are no additional fees or costs.
Please contact us if you would like to discuss this in further detail.
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The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.