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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
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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
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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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
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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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)
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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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Affluent Retirees: Don't Rule Out Taxable Bonds |
MORNINGSTAR - August 25, 2011 - By Christine Benz
Even modest taxable exposure can help smooth a muni portfolio's performance.
Affluent retired readers know the drill: When withdrawing money from a portfolio to pay living expenses, it's best to start with taxable accounts first, to preserve the tax-saving benefits of IRAs and company retirement plans for as long as possible. And what to keep in those taxable accounts? Municipal bonds, of course, because their income is generally free from federal income taxes and might be free of state and local taxes, too.
That's not a bad rule of thumb. But should your whole taxable fixed-income portfolio consist of munis? Maybe not. Even though you can diversify geographically with municipal bonds, and you can also spread your muni portfolio across securities with varying credit qualities and levels of interest-rate sensitivity, it's wise to consider more than just munis for your taxable bond portfolio, especially if you're retired and actively tapping the money in your account for living expenses.
A Performance-Smoothing Benefit
One of the key benefits of venturing beyond municipal bonds is straightforward: diversification. Just as one could expect small-cap emerging markets stocks to exhibit a different performance pattern than U.S. blue chips, so will certain taxable-bond sectors tend to behave a lot differently than municipal bonds at various points in time.
In 2003, for example, the Barclays Municipal Bond Index returned 5.3%--a perfectly respectable, even strong, rate of return, at least in absolute terms. Meanwhile, Treasury Inflation-Protected Securities returned 8.4% that year, and the Barclays High-Yield Corporate Index posted a scorching 29.0% return. High-quality corporates gained 8.0%.
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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