Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Muni Bond Fund versus Individual Munis
Old 03-02-2008, 09:36 AM   #1
Recycles dryer sheets
mark500's Avatar
Join Date: Feb 2006
Posts: 146
Muni Bond Fund versus Individual Munis

I have looked into the potential benefits of buying individual municipal bonds from my state through Vanguard brokerage versus buying Vanguard municipal bond funds (no state funds exist for my state).

I have found little if any benefit of buying individual munis from my state with regard to yield to maturity, and accounting for credit risk.
Vanguard's expense ratios are so low in the admiral funds, that it's a wash. Even if one accounts for my state's income taxation of the Vanguard muni funds, buying my state's individual munis does not make that much difference.

Have any of you muni bond gurus looked closely at this?

Picking individual munis is fairly complicated. I had to read a book to understand them.

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.

Winston Churchill
mark500 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-02-2008, 11:57 AM   #2
Thinks s/he gets paid by the post
twaddle's Avatar
Join Date: Jun 2006
Posts: 1,376
I used to buy individual munis, but I wouldn't today. They've always been fairly opaque and illiquid, but the default rate for all issues was so low it didn't matter.

Today, it matters. The insurance wrappers are broken. There's a liquidity crisis. And for the first time in a long time, there may be real default risk in some issues.

Vanguard is a good approach. You can also find some deals in the CEF world, but you'd need to do a bit more research. For example, it might be a good idea to avoid leveraged funds until the auction rate security market crisis is over.

Favorite ERF quote: "I'm not going to waste my time on someone who's more interested in being stubborn or obtuse or intolerant." -- Nords
Favorite ERF error message: "Sorry Nords is a moderator/admin and you are not allowed to ignore him or her."
twaddle is offline   Reply With Quote
Old 03-03-2008, 05:44 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,019
not a guru, just a lazy investor. for myself, getting into individual munis vs MFs means i'd have to think, and i gave that up for FIRE.

for what it's worth, i've been happy with Vanguard in VWAHX and VNYTX. A Fido bond MF was mentioned in another thread, but remembering the name/ticker, again, would make me think.
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
New ETF: Muni Bond Funds for CA (and NY) tricky88 Stock Picking and Market Strategy 3 11-15-2007 10:41 PM
Muni Bond ETFs ats5g FIRE and Money 1 09-14-2007 07:43 PM
Proposed law may change muni bond taxes wildcat FIRE and Money 2 09-10-2006 05:52 PM
Closed-End Muni Fund dandan14 FIRE and Money 10 07-28-2005 02:33 PM
Hold regular bond in 401k or muni in taxable? soupcxan FIRE and Money 9 04-07-2005 04:54 PM


All times are GMT -6. The time now is 09:13 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.