Muni Bond (and Muni Bond Fund) Discussion

[COcheesehead]

VIX up almost 15% in a few days.

[njhowie]

Anyone have any good/great recent purchases they've made? Give us the CUSIP and details.

I continue picking up short, intermediate, and longer term issues. Happy with them all. I can be very happy with 6% and higher for strong longer term issues.

On Friday, just before market close, I sold all of mom's remaining oil stocks that she's held forever. Wanted to get it all in for 2022 taxes and be done with them. Been moving the proceeds into CDs, treasuries, and munis this week. Happy to be done with the oils because of all the volatility over the past few years. Very happy to have gotten her out at/near the all-time highs on XOM and COP. Had heart palpitations a few times with them just three years ago.

[jazz4cash]

I think I may be going to the dark side (equities).

[njhowie]

Quote:

Originally Posted by jazz4cash I think I may be going to the dark side (equities).

Well, everyone has "some" equities...even me. Question is, what is the allocation, 20%,40%, 60%, 80%? You still have your MYGAs and CDs, no?

[jazz4cash]

I am 70ish stocks. Maturing fixed income securities are getting redeployed to current needs, medium term fixed, and equities. Maybe. The fixed income is performing quite well. Ladder is filling up and I just realized my current needs will be met by SS once I decide to start.

[COcheesehead]

I still scan munis and will buy an occasional one for my taxable account ladder. There have been so many taxable bonds that pay higher yields even with the taxation included that is where most my maturing bond money goes.

As for equities. I am at 25%. Will slowly increase that over 2023. I can’t ever see myself holding more than 35-40%. My plan works at a minimal equity allocation.

[njhowie]

Strong jobs numbers, Fed will continue raising rates (so they say), and yet the 10-year yield is off by a lot today. Place your bets.

[53anddone]

I think Muni's have peaked for the time being. I have around 15% of my investible assets there and wish it were more but in the meantime have been using rollover money in T-bills and a few equity buys.

[COcheesehead]

Quote:

Originally Posted by njhowie Strong jobs numbers, Fed will continue raising rates (so they say), and yet the 10-year yield is off by a lot today. Place your bets.

I stuck with my mechanical reinvestment strategy in my ladders. Putting maturing funds into the long end, which for me is 5-9 years. Everything I bought back in October to mid November was at yields you just can’t get today.

I think the short end, 2 year and less, will rise a bit, the long end not so much.

[njhowie]

Quote:

Originally Posted by COcheesehead I stuck with my mechanical reinvestment strategy in my ladders. Putting maturing funds into the long end, which for me is 5-9 years. Everything I bought back in October to mid November was at yields you just can’t get today. I think the short end, 2 year and less, will rise a bit, the long end not so much.

I'm seeing/doing the same. For me, long end is 10 to 20 years, even a sprinkle of 25 and 30 years. I'm no longer playing with the 100 year, sold the one issue I had yesterday for a good price. If I want to go longer term, the 30 year munis have better yields at this time and will be less volatile should rates go higher at the longer end of the yield curve. Short end, if I see a great CD on my secondary market screen I grab it. I can usually get small 5.5% to 6% lots once or twice a week for up to 2 year maturity.

[Mr._Graybeard]

I'm laying back awhile -- I may need some ready cash to buy an adjoining piece of vacant land.

[COcheesehead]

Quote:

Originally Posted by Mr._Graybeard I'm laying back awhile -- I may need some ready cash to buy an adjoining piece of vacant land.

We’re buying a lot next to us as well. They keep delaying closing. Every month that passes I earn about $1000 on the cash. They can take as long as they like now.

[COcheesehead]

Quote:

Originally Posted by njhowie I'm seeing/doing the same. For me, long end is 10 to 20 years, even a sprinkle of 25 and 30 years. I'm no longer playing with the 100 year, sold the one issue I had yesterday for a good price. If I want to go longer term, the 30 year munis have better yields at this time and will be less volatile should rates go higher at the longer end of the yield curve. Short end, if I see a great CD on my secondary market screen I grab it. I can usually get small 5.5% to 6% lots once or twice a week for up to 2 year maturity.

I am fully invested in my taxable account now with maturing funds happening mostly mid to late 2023.
I have some cash in IRAs, but feeling ambivalent about fixed income at the moment feeling if I invest short, I may miss a crater in equities that I would like to buy.
I am over funded in my ladders. They throw off way more than we spend right now.

[pb4uski]

Quote:

Originally Posted by COcheesehead I stuck with my mechanical reinvestment strategy in my ladders. Putting maturing funds into the long end, which for me is 5-9 years. Everything I bought back in October to mid November was at yields you just can’t get today. I think the short end, 2 year and less, will rise a bit, the long end not so much.

That's similar to my plan. I have a big slug maturing 1Q23 that I'll use about 1/2 to fill in my 3Q23-1Q24 rungs and at that point my quarterly rungs from 2Q23-4Q25 will all be full.

Then with maturities I'll start building quarterly rungs for 1Q-3Q26 and 1Q-3Q27... I already have rungs filled for 4Q26 and 4Q27.

Ultimate goal is to have ~18 quarterly rungs that are about the same size and have a rolling ladder instead of the bond fund that I used to have.

At some point I might make the rungs a little smaller but have more rungs (longer duration), but not for a while.

[njhowie]

Quote:

Originally Posted by COcheesehead I am fully invested in my taxable account now with maturing funds happening mostly mid to late 2023. I have some cash in IRAs, but feeling ambivalent about fixed income at the moment feeling if I invest short, I may miss a crater in equities that I would like to buy. I am over funded in my ladders. They throw off way more than we spend right now.

Ditto, ditto, ditto...I need to save all the income from the taxable accounts, and what DW brings home for a couple months so we don't get caught short if some unexpected expense pops up. She's maxed out on her 401k, so with the new higher limits, we'll see how much lower that makes her paychecks. I've been grabbing every really good muni I've found when I've had the cash. I need to back off a little, minimally in the taxable accounts.

[sengsational]

Reading here, I wonder how much I'm leaving on the table.

Back when rates were nothing in money markets, I bought an 18 month, 5 rung taxable muni ladder. This is for my mom, who doesn't need to worry about taxes. Just spent an hour grabbing the best deals of that day. Then, after one matures, I just pop on the one time, search the long end, and buy the best deal I find. Done. Is there reason to justify many hours of checking and re-checking the available issues, or is taking whatever is available at a random time sufficient?

[njhowie]

Quote:

Originally Posted by sengsational Reading here, I wonder how much I'm leaving on the table. Back when rates were nothing in money markets, I bought an 18 month, 5 rung taxable muni ladder. This is for my mom, who doesn't need to worry about taxes. Just spent an hour grabbing the best deals of that day. Then, after one matures, I just pop on the one time, search the long end, and buy the best deal I find. Done. Is there reason to justify many hours of checking and re-checking the available issues, or is taking whatever is available at a random time sufficient?

For mom, your approach is fine. Again, from where we've been over the past ten years, it's all good. Don't stress about possibly leaving tenths on the table. When rates were at 1% and lower, sure, a tenth was meaningful. At 4%, it's almost meaningless.

[COcheesehead]

Quote:

Originally Posted by sengsational Reading here, I wonder how much I'm leaving on the table. Back when rates were nothing in money markets, I bought an 18 month, 5 rung taxable muni ladder. This is for my mom, who doesn't need to worry about taxes. Just spent an hour grabbing the best deals of that day. Then, after one matures, I just pop on the one time, search the long end, and buy the best deal I find. Done. Is there reason to justify many hours of checking and re-checking the available issues, or is taking whatever is available at a random time sufficient?

At a specific duration say five years or so, there isn’t much yield variation within the top two to three bonds. Where I have found the yield difference more dramatic is across bond categories. Taxable bonds both agency and corporate have been paying more than munis - even when taxation is considered. I found myself buying more from those categories as of late.

[pb4uski]

Quote:

Originally Posted by sengsational Reading here, I wonder how much I'm leaving on the table. Back when rates were nothing in money markets, I bought an 18 month, 5 rung taxable muni ladder. This is for my mom, who doesn't need to worry about taxes. Just spent an hour grabbing the best deals of that day. Then, after one matures, I just pop on the one time, search the long end, and buy the best deal I find. Done. Is there reason to justify many hours of checking and re-checking the available issues, or is taking whatever is available at a random time sufficient?

I'm hoping to get to where you are for your Mom soon. With maturities in the first half of 2022 I should be able to fill out a ladder with equal rungs that will mature quarterly for 4-1/2 years... from 3Q2023 to 4Q27.

Unless something unusual comes about we won't need that money for a while so each quarter as bonds mature I'll buy a replacement bond at the end of the ladder, adding another rung to my ladder to replace the rung that matured... a rolling bond ladder. But my ladder isn't munis but CDs, USTs or GSE bonds... generally whatevr was highest yielding at the time. Overall yield is a 5.2%.

[sengsational]

Thanks, all, for the thoughts. At the time of the original build, munis were paying the best, I think. I suppose I could check CD's and treasury rates as the munis mature, but I don't want to have to open a discussion about credit risk, no matter how small, so probably won't delve into corporate bonds for her.