Municipal Bond Forum
Priced too high?
Q
I may have to look for other investments. Bonds are getting priced too high.
A
James A. Klotz responds:
There is no denying that bonds are more expensive. As we have discussed, this really is not a surprise to us. We thought rates were headed down and will continue to do so.
The compelling reason to buy bonds, in this market, is that municipal bonds are actually inexpensive relative to other alternative investments. Even at 4 1/2% (and you can do better), your return would be comparable to more than 7 1/2% on a taxable investment, in your tax bracket. Where can you find this kind of return with the security of a AAA insured bond?
Start here.
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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.