FMSbonds, Inc.’s Municipal Bond Forum is an exclusive opportunity for investors to submit questions and comments on the bond market or to respond to one of our articles.
To participate, just send us an e-mail. Be sure to include your name or initials and your state of residence. Posted e-mails may be edited for length and clarity. If you prefer a private response, please note that in your e-mail. Responses are provided by James A. Klotz, president and co-founder of FMSbonds, Inc., a municipal bond specialist for more than 35 years, and other members of the firm as noted.
Postings are listed by date. If you have any questions, please call us at 1-800-367-2663 or e-mail us.
I just read an article on Vanguard’s Web site that discussed the “non crisis” in the muni market. It occurred to me that you wrote the same thing more than 1 ½ years ago in your article, “A Funny Thing Happened While the Pundits Were Screaming“. I bet this guy makes the big bucks for his expertise!
J.S., Pennsylvania
I read your article “In Fiscal Cliff Debate, One thing is Clear“, and I agree the No. 1 investment for investors is tax-free bonds. I’m a poster boy for tax-free bonds and have been buying bonds for the past 20 years. In fact, I have several million dollars worth of bonds with your firm and have enjoyed my buying experience with Andrew Blum. When will the supply of munis increase, and when will we start seeing those long-term 5% yields at par?
L.S., Texas
What do think about the idea being discussed in Washington of capping the benefit of municipal at 28%? Does that mean that if you have $100,000 in tax-free bonds, only $28,000 would be tax free and the balance would be taxable?
A.C., New Jersey
Can you tell me about the new 3.8% tax and its impact on tax-free muni bonds?
T.B., Florida
Under the Master Settlement Agreement, are payments by the tobacco companies to the states required to continue in perpetuity or do they sunset after a certain year? If they continue in perpetuity, will there ever be a default on tobacco bonds, or just a delay in repayment?
P.K.
How important are the early call options when purchasing long-term bonds? Many of my long-term bonds paying 6% are now being called, so I am losing the benefit the longer term afforded me.
J.S., Pennsylvania
I agree with your message in “Bernanke’s Message to Muni Investors“. I have ignored the “wait for better days” advice and bought munis on a regular basis for over 30 years. It’s like having many small, clean oil wells in your backyard. Living and loving it!
R.D., Florida
I read recently that both Gov. Romney and President Obama are trying to make tax-free muni interest taxable. I would assume that if it did happen, it would only affect new issues. Do you have anything you could tell me on the likelihood of this happening and if it would affect current issues?
W.A., California
I was reading your article, “Bernanke’s Message to Muni Investors” and the comment to “go long.” What exactly does that mean? I have Oregon munis.
C.M., Oregon
We have purchased numerous long-term tax-free bonds from FMS, all of which have been transferred to, and held or administered by a major U.S. banking entity. If the major bank that holds or administers our bonds becomes insolvent, would our income stream, and/or the associated liquidity of our bonds be interrupted?
C.W. Texas
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