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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
|
848.03 |
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S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
|---|
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Muni Bond Defaults Will Be Rare |
Forbes - Jan. 19, 2011 - by Robert Lenzner
My muni bond guru believes that “defaults on municipal bonds will remain relatively rare “despite the severe fiscal pressures on state and local governments.
Yes, interest costs may rise and current bond prices decline; but the main purpose of owning muni bonds– to collect tax-free income will be relatively safe, especially on bonds that are backed by pre-refunded treasuries, or guaranteed by the Federal Housing Authority(FHA), part of the federal government, or have a lien on the revenues of local services like water, electricity or toll roads. In New York, a good example would be Triborough Bridge Authority bonds which use the tolls paid by cars entering and leaving New York City to service the annual interest payments owed investors.
“The more serious issue is the low income that accompanies high bond prices,” warns my guru, who insisted his name not be used in this private memo to me.
“We are acutely aware of the second great evil against which bond portfolios are expected to protect themselves, the rising interest and falling bond prices that will accompany the inflation that the Fed is currently attempting to promote,” he warns. Meaning, you will be forced to hold until maturity or experience a capital loss.
The reason most wise investors hold portfolios of munis of average duration 3-5 years.
As for holders of New York State tax-free bonds, a renowned financial expert, Richard Ravitch, until recently Lt. Gov. of the state, assures me that the interest owed by the state on its $63 billion of debt is such a small % of the state budget that is bound to be paid. And this is a state budget that is close to $10 billion in the hole, says Ravitch.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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