Confused about bonds

[Boho]

There's increasing talk about munis being bad, but I had too much cash and the market is still high I had so few bonds that I decided to buy iShares New York Muni Bond ETF (nyf), setting the limit to 109.50. Well, first thing in the morning it was partially filled. People had plenty of time to avoid this fund based on prior news about interest rates and whatnot, so I'm hoping it's already at an appropriate price. I'm not in a high tax bracket, but I think I read a high tax bracket may not help with future changes.

So, is NYF a bad bond choice? I'm a New Yorker.

 

[RetiredGypsy]

So, is NYF a bad bond choice?

You probably wanted to find that out before you bought into it.

 

[Big_Hitter]

dunno, I buy individual munis

 

[Boho]

You probably wanted to find that out before you bought into it.

Yeah. I kind of tried and still wasn't sure, but I'm glad I'm helping NY. I certainly don't want to pay for the w...are we allowed to talk about...well, you know.

 

[nun]

So, is NYF a bad bond choice? I'm a New Yorker.

The time to ask that question was before you bought.

 

[ERD50]

You probably wanted to find that out before you bought into it.

The time to ask that question was before you bought.

If you have followed the OP's other posts, you'll see that understanding first is just not his Modus Operandi.

Hey, he was able to beat a computer at Rock, Paper, Scissors. What else do you need to know to beat the market?

-ERD50

 

[Boho]

Hey, he was able to beat a computer at Rock, Paper, Scissors. What else do you need to know to beat the market?

Nothing else, if you believe the indexers. I happen to believe you need to know more so I do the research.

 

[RetiredGypsy]

...I decided to buy iShares New York Muni Bond ETF (nyf)...So, is NYF a bad bond choice?

Nothing else, if you believe the indexers. I happen to believe you need to know more so I do the research.

One of these things is not like the other.

 

[Boho]

One of these things is not like the other.

The research uncovered so much speculation, and so much that seems to go against the whole diversification mantra, and the stuff about the market "knowing" that it was still hard to make the decision, but I like that I snatched up 45 out of the 75 shares that I ordered for a price that appears to be low. And I'm helping NY. I'm just curious about what others make of all that's been said about munis.

 

[RetiredGypsy]

There's increasing talk about munis being bad, but I had too much cash...I had so few bonds that I decided to buy iShares New York Muni Bond ETF (nyf)...I'm hoping it's already at an appropriate price.

So, is NYF a bad bond choice?

I happen to believe you need to know more so I do the research.

The research uncovered so much speculation

There's increasing talk about munis being bad

So, is NYF a bad bond choice?

There's increasing talk about munis being bad..I decided to buy iShares New York Muni Bond ETF (nyf)

None of these things is like the other.

 

[Boho]

I disagree.

I hope you know by now that I won't necessarily agree with what I read. I'm not swayed all the way to one side or the other with each fact I read.

And the bond fund I just bought is the only security that gained today.

 

[DrRoy]

dunno, I buy individual munis

+1. I want to manage the maturity and credit risk of my bonds so I also buy individual ones, not a fund.

 

[Big_Hitter]

+1. I want to manage the maturity and credit risk of my bonds so I also buy individual ones, not a fund.

getting those cash coupon payments each month is really, really nice

I could get used to that...

Not sure I'd want to go all in though

 

[hesperus]

dunno, I buy individual munis

Agree. I recently went 'all in' and put together $1M in a corporate/muni ladder a month or so ago, and also enjoy the control. It's work, but it's how I like to manage my fixed income. Still have a few bond funds, but they're in the minority now.

 

[brewer12345]

With muni bonds you are taking credit, duration and tax risk. You are compensated chiefly by the yield. So I would ask myself:


- What is the duration of the fund? Is this risk too large for me?
- What kinds and amounts of credit risk am I taking on these bonds? Average rating? How much is below A and unrated? Are these risks I am willing to take?
- Do I believe there is some risk that the favored tax status of munis will change? Am I willing to bear this hard-to-quantify risk?
- Does the yield on these bonds compensate me adequately for the risks involved? How does this fund fit in with the rest of my portfolio?




Best to do your navel-gazing before you buy, but since you can sell with a few clicks it is still worth doing the thought process.

 

[ESRwannabe]

There's increasing talk about munis being bad, but I had too much cash and the market is still high I had so few bonds that I decided to buy iShares New York Muni Bond ETF (nyf), setting the limit to 109.50. Well, first thing in the morning it was partially filled. People had plenty of time to avoid this fund based on prior news about interest rates and whatnot, so I'm hoping it's already at an appropriate price. I'm not in a high tax bracket, but I think I read a high tax bracket may not help with future changes.

So, is NYF a bad bond choice? I'm a New Yorker.

The talk about munis is that the tax changes might make them less valuable depending on what tax bracket you end up in. If your in the top tax bracket most likely nothing will change for you in terms of muni value.

 

[Sunset]

The research uncovered so much speculation, and so much that seems to go against the whole diversification mantra, and the stuff about the market "knowing" that it was still hard to make the decision, but I like that I snatched up 45 out of the 75 shares that I ordered for a price that appears to be low. And I'm helping NY. I'm just curious about what others make of all that's been said about munis.

You could help them a lot better, I heard there is a bridge for sale that lots of people pass up.

 

[exnavynuke]

I disagree.

I hope you know by now that I won't necessarily agree with what I read. I'm not swayed all the way to one side or the other with each fact I read.

And the bond fund I just bought is the only security that gained today.

It may be the only security *you have* that gained today, but it's far from the only one.

 

[Boho]

You could help them a lot better, I heard there is a bridge for sale that lots of people pass up.

Maybe I shouldn't bother voting either.

 

[Big_Hitter]

^ you may want to on bond referenda

 

[MRG]

I'm just glad you're only spending money. I mean some people learn about firearms with the same methodology.

 

[marko]

One of these things is not like the other.

Asking here might be part of the research.

 

[jimbee]

Nothing else, if you believe the indexers. I happen to believe you need to know more so I do the research.

Indexers don't try to beat the market.

 

[meierlde]

The talk about munis is that the tax changes might make them less valuable depending on what tax bracket you end up in. If your in the top tax bracket most likely nothing will change for you in terms of muni value.

If they talk seriously about muni changes expect the Governors, Mayors, County Commissions, Special Districts, School Boards etc to descend on Washington, pointing out that it will raise state and local taxes as much as it saves the Federal Government.

 

[Boho]

Indexers don't try to beat the market.

They think that to beat the market you'd need an almost magical insight into what other investors will do. I think knowing how people behave helps but you can also do normal research. For example, past performance and the opinions of analysts matter.