Comments on: How Safe Are Municipal Bonds http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/ Personal Finance, Investing, Banking, Credit Cards, Savings, and More Mon, 06 Feb 2012 04:18:52 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Muni Bond Defaults Prediction Fails http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/comment-page-1/#comment-2331 Muni Bond Defaults Prediction Fails Tue, 03 Jan 2012 13:09:34 +0000 http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/#comment-2331 [...] experts didn’t buy Whitney’s prediction. Even I wrote a 2011 article about how safe are muni bonds when people kept asking me about it. Of course, none of those stories was a big, inflammatory [...] [...] experts didn’t buy Whitney’s prediction. Even I wrote a 2011 article about how safe are muni bonds when people kept asking me about it. Of course, none of those stories was a big, inflammatory [...]

]]> By: Finance Gourmet http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/comment-page-1/#comment-60 Finance Gourmet Tue, 23 Mar 2010 02:20:35 +0000 http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/#comment-60 I'm not saying that it cannot happen. I'm saying that the risk is much lower than most other investment options. (Bank deposits are not investments.) The ratings are actually set by ratings agencies, not regulators. However, in this case, that isn't necessarily any more comfort considering these are the same ratings agencies who rated all the now "toxic" mortgage securities AAA right up until they started plummeting. All you have to do is look at California. The budget is a mess, the state's finances are in shambles. They even issued "IOUs" for a while, but they did not default on a single bond. Munis can be defaulted on (see Orange County and New York) however, it is much rarer than people give it credit for. That all adds up to the fact that even a minimally diversified muni bond portfolio can be much safer (from a default risk perspective) than just about anything else. I’m not saying that it cannot happen. I’m saying that the risk is much lower than most other investment options. (Bank deposits are not investments.) The ratings are actually set by ratings agencies, not regulators. However, in this case, that isn’t necessarily any more comfort considering these are the same ratings agencies who rated all the now “toxic” mortgage securities AAA right up until they started plummeting.

All you have to do is look at California. The budget is a mess, the state’s finances are in shambles. They even issued “IOUs” for a while, but they did not default on a single bond. Munis can be defaulted on (see Orange County and New York) however, it is much rarer than people give it credit for. That all adds up to the fact that even a minimally diversified muni bond portfolio can be much safer (from a default risk perspective) than just about anything else.

]]> By: Tim McLeer http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/comment-page-1/#comment-59 Tim McLeer Sat, 06 Mar 2010 05:09:34 +0000 http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/#comment-59 You sound Like Bernanke in 2008 "the housing market is stable" Just because a municipal bond is rated AAA does not mean that a municipality is safe. This rating is set by regulators who by the way are lobbyist for municipal bonds!!! Get real and tell the truth----Local Municipalities can file chapter 9 bankruptcy and the bonds become worthless. You sound Like Bernanke in 2008 “the housing market is stable”

Just because a municipal bond is rated AAA does not mean that
a municipality is safe. This rating is set by regulators who by
the way are lobbyist for municipal bonds!!!

Get real and tell the truth—-Local Municipalities can file chapter
9 bankruptcy and the bonds become worthless.

]]> By: trad http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/comment-page-1/#comment-58 trad Mon, 01 Jun 2009 09:10:06 +0000 http://financegourmet.com/blog/investing/how-safe-are-municipal-bonds/#comment-58 OHH I am amazed with it. It is a good thing for my search on the net. Thanks. ^_^ OHH I am amazed with it. It is a good thing for my search on the net. Thanks. ^_^

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