Muni Bond Ladder

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fipt2030
Posts: 47
Joined: Tue Oct 03, 2017 8:09 am

Muni Bond Ladder

Post by fipt2030 » Mon Oct 30, 2017 2:42 pm

Any thoughts on Bond ladder vs Bond funds ( Muni)

I am leaning towards building one diversified as suggested by Larry ( 1 Million taxable), just don’t care for price volatility of bond funds if Feds do increase rates. I don’t need this money for 20-30 years

Anyone tried it with FA/Brokerage help, would love some feedback

jebmke
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Joined: Thu Apr 05, 2007 2:44 pm

Re: Muni Bond Ladder

Post by jebmke » Mon Oct 30, 2017 2:46 pm

Bond fund fund volatility is the direct result of bond volatility.
When you discover that you are riding a dead horse, the best strategy is to dismount.

fipt2030
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Joined: Tue Oct 03, 2017 8:09 am

Re: Muni Bond Ladder

Post by fipt2030 » Mon Oct 30, 2017 2:53 pm

I agree, but if you plan on holding till maturity, it would help downplay the volatility like in a 10 year bond ladder

jebmke
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Re: Muni Bond Ladder

Post by jebmke » Mon Oct 30, 2017 2:59 pm

fipt2030 wrote:
Mon Oct 30, 2017 2:53 pm
I agree, but if you plan on holding till maturity, it would help downplay the volatility like in a 10 year bond ladder
You might want to read the Wiki section on bond funds vs. ladders before you decide.
When you discover that you are riding a dead horse, the best strategy is to dismount.

fipt2030
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Re: Muni Bond Ladder

Post by fipt2030 » Mon Oct 30, 2017 3:01 pm

Will do, thank you

TheAncientOne
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Re: Muni Bond Ladder

Post by TheAncientOne » Mon Oct 30, 2017 3:12 pm

I am increasingly skeptical as to the wisdom of investing in municipal bonds. The dawning recognition that state and local governments have made promises of pension and retiree health care to their employees that they will have no ability to fulfill should fill those holding municipal bonds with fear and trembling. In recent bankruptcy cases such as Detroit and Vallejo, bondholders took a far steeper haircut than did employees or retirees. In Puerto Rico, it appears that bondholders will be lucky to recover more than 30 cents on the dollar.

For those interested in this subject, the website pensiontsunami.com is a good place to get up to speed although it is somewhat California centric. In the meantime, unless you're confident you can do worst case credit analysis on municipal bonds, I'd avoid this field altogether.

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patrick013
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Re: Muni Bond Ladder

Post by patrick013 » Mon Oct 30, 2017 7:07 pm

Did you read Swedroe's bond book ? My only bond strategy
right now is to have CD's mature when the FFR might peak.
age in bonds, buy-and-hold, 10 year business cycle

fipt2030
Posts: 47
Joined: Tue Oct 03, 2017 8:09 am

Re: Muni Bond Ladder

Post by fipt2030 » Mon Oct 30, 2017 8:45 pm

Yep, he advises bond ladder if you can invest 1 M

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