Muni bonds are getting killed. Are you bailing out?

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Van
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Muni bonds are getting killed. Are you bailing out?

Post by Van » Mon Nov 14, 2016 6:43 pm

[See my post on Page 2 regarding proposed legislation -- admin LadyGeek]

Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.

Sidney
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Re: Muni bonds are getting killed. Are you bailing out?

Post by Sidney » Mon Nov 14, 2016 6:47 pm

How much are they down? I remember a day in 1987 when stocks dropped 22%
I always wanted to be a procrastinator.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by fabdog » Mon Nov 14, 2016 6:52 pm

Lots of anticipations there... some or all of it may occur, but I'm not smart enough to figure out which ones, or when. So sticking with what I have until the facts change

Mike

Van
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Re: Muni bonds are getting killed. Are you bailing out?

Post by Van » Mon Nov 14, 2016 6:53 pm

Just today: Vanguard Intermediate-Term Tax Exempt was down 1.13% and Vanguard High-Yield Tax Exempt was down 1.5%.

jdb
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Re: Muni bonds are getting killed. Are you bailing out?

Post by jdb » Mon Nov 14, 2016 7:24 pm

Thanks for the update, I don't follow the bond market on a monthly basis, let alone day to day. Will be rebalancing and buying more of the intermediate tax exempt Vanguard fund.

soboggled
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Re: Muni bonds are getting killed. Are you bailing out?

Post by soboggled » Mon Nov 14, 2016 7:41 pm

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.

Don't really get that last one. If the feds increase infrastructure spending, shouldn't it help municipalities, albeit at the expense of federal taxpayers?

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SquawkIdent
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Re: Muni bonds are getting killed. Are you bailing out?

Post by SquawkIdent » Mon Nov 14, 2016 7:42 pm

I currently don't have a position but I am starting to get very interested in one as the yields rise through price erosion. :sharebeer

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ogd
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Re: Muni bonds are getting killed. Are you bailing out?

Post by ogd » Mon Nov 14, 2016 7:43 pm

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.

So let me get this straight -- you were okay with buying munis at lower yields, but now that they're meaningfully higher (although you have to give the SEC yield figure a little time to adjust), you want to sell out. All this in the hope that you can see and act on a trend in the most basic graph there is, that somehow the other market participants, many of them professionals, are missing.

This isn't a good way to invest. More in my post in a parallel thread: viewtopic.php?f=10&t=203262

FoolStreet
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Re: Muni bonds are getting killed. Are you bailing out?

Post by FoolStreet » Mon Nov 14, 2016 7:46 pm

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.


NAV drops, yields rise. Yay. More income. I will TLH along the yield curve for a month or two, then get back in.

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Riprap
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Re: Muni bonds are getting killed. Are you bailing out?

Post by Riprap » Mon Nov 14, 2016 7:47 pm

No, not getting out.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Tycoon » Mon Nov 14, 2016 7:50 pm

Nope.
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Van
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Re: Muni bonds are getting killed. Are you bailing out?

Post by Van » Mon Nov 14, 2016 7:59 pm

ogd wrote:
Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.

So let me get this straight -- you were okay with buying munis at lower yields, but now that they're meaningfully higher (although you have to give the SEC yield figure a little time to adjust), you want to sell out. All this in the hope that you can see and act on a trend in the most basic graph there is, that somehow the other market participants, many of them professionals, are missing.

This isn't a good way to invest. More in my post in a parallel thread: viewtopic.php?f=10&t=203262


I never said what I was doing or thinking. I asked what others are considering.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by GoldenFinch » Mon Nov 14, 2016 8:03 pm

Wouldn't bailing out mean selling low? I thought we were supposed to stay the course.

goingup
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Re: Muni bonds are getting killed. Are you bailing out?

Post by goingup » Mon Nov 14, 2016 8:08 pm

We had too large a cash position so I bought last week and will buy again before year end. The price is about where it was June 2015. With the rise in equities over the this year I really should have been adding more bonds all along.

Van, if you are an accumulator keep buying munis as needed to maintain your AA. If you're a retiree you'll enjoy greater yields. If you're overly concerned about a drop in portfolio value you could swap for shorter term bonds and book the loss.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Quark » Mon Nov 14, 2016 8:17 pm

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.

If the market thought prices were going to drop slowly for a long time, then prices would be lower today. What's your reason for believing current prices don't already reflect all information and expectations about the future?

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Re: Muni bonds are getting killed. Are you bailing out?

Post by dratkinson » Tue Nov 15, 2016 4:34 am

Van wrote:Just today: Vanguard Intermediate-Term Tax Exempt was down 1.13% (16 cents) and Vanguard High-Yield Tax Exempt was down 1.5% (17 cents).


I hadn't noticed "killed".

I could use more munis. Would be nice if prices continue to drop until first of month when I have new money to buy more.

Hmmm. Just noticed I have a small LT loss in VFWAX (FTSE All-world ex-US index). Maybe I could TLH that and use the proceeds to fill my new (last year) single-state muni allocation in one fell swoop... and stop nickel and diming it. Something to think about.

Thanks for the heads up.
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Re: Muni bonds are getting killed. Are you bailing out?

Post by RubyTuesday » Tue Nov 15, 2016 4:37 am

Will be pretty happy to see yields finally start moving up a bit.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by wolf359 » Tue Nov 15, 2016 6:56 am

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.


There is a forum rule against debating proposed legislation. I've found that that is a good rule to apply to my investment strategy as well.

Sure, Trump is the POTUS-elect. Yes, people anticipate changes.

However, he's not President until January. He can't pass laws without Congress. Congress may or may not agree with him on specific changes. Even if a change occurs, it takes time to implement. For example, a tax cut passed in 2017 won't impact until you file for taxes in 2018. President Obama promised health care reform in 2008, but Obamacare wasn't passed until March 2010, with the major provisions not phasing in until 2014.

Someone making decisions based on an unknown impact of pending legislation in 2008 would probably have been wrong about the form, shape, nature, and effectiveness of those proposed changes.

So, no, I'm not making changes based on the election. I'm still heavily in munis for my taxable bond holdings.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by lostdog » Tue Nov 15, 2016 7:14 am

What happened with staying the course?
"Our life is frittered away by detail. Simplify, simplify." -Thoreau | Vanguard Total World Index

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Valuethinker » Tue Nov 15, 2016 7:17 am

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.


Do not overreact.

As other posters have pointed out, it's a long way from cup to lip (as they say). A president proposes and the Congress disposes.

My own view is that policy will likely be more inflationary in the long term, but I don't know anything the market does not. Bond yields are still very close to historic lows.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Valuethinker » Tue Nov 15, 2016 7:17 am

fabdog wrote:Lots of anticipations there... some or all of it may occur, but I'm not smart enough to figure out which ones, or when. So sticking with what I have until the facts change

Mike


Excellent advice

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Wagnerjb » Tue Nov 15, 2016 9:03 am

Sidney wrote:How much are they down? I remember a day in 1987 when stocks dropped 22%


I remember that day too. Those of us who lived through that kind of sudden volatility know enough to take a deep breath when markets get volatile. And we know that we will live through the volatility. And we know to rebalance if necessary. Nothing more needed.

Best wishes.
Andy

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Nowizard » Tue Nov 15, 2016 9:18 am

Not changing the asset allocation ratio which remains at 60/40, a level that has less bonds than would be typically recommended for a retiree my age. As with many things other than investments based on recent events, it is wait and see (Stay the course), though the phrase "Expect the best, prepare for the worst" also comes to mind in a nagging manner.

Tim

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Re: Muni bonds are getting killed. Are you bailing out?

Post by JW-Retired » Tue Nov 15, 2016 9:23 am

We never bail out of anything now. Not since 1996 when we knew the US stock market couldn't possibly go much higher. :oops:

Luckily, it was only a partial bail so the market lesson learned (we know nothing) was well worth it.
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Re: Muni bonds are getting killed. Are you bailing out?

Post by Dulocracy » Tue Nov 15, 2016 9:36 am

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.


Is the reason for the change the reason you pointed out or that everyone anticipates that the fed will raise rates? Who knows? Does it matter?

Personally, if I had money lying about, I would likely be purchasing into muni bonds starting now and buying over time. Unfortunately, for some time, I will not be making any investments in taxable because of investments I am making in my own business.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

INDUBITABLY
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Re: Muni bonds are getting killed. Are you bailing out?

Post by INDUBITABLY » Tue Nov 15, 2016 9:48 am

I can't believe I'm writing this, but I will be tax loss harvesting my bonds. If you held corporates during the 2009 debacle, was this something that you did? I'm young enough that it still feels weird.
"Ah ha! Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor!" - Dr. Zoidberg

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Radjob4me » Tue Nov 15, 2016 10:11 am

INDUBITABLY wrote:I can't believe I'm writing this, but I will be tax loss harvesting my bonds. If you held corporates during the 2009 debacle, was this something that you did? I'm young enough that it still feels weird.


I was about to pose a similar question to this - I bought about 100k of Fidelity Mass Muni bond fund this summer as an alternative to saving in 529 plan and don't need the money for a few years and won't bail. But I can tax-loss harvest this fund due to the fall in NAV price, right? I had a good income year and so I could sell my position now for the $3500 loss and then repurchase in 30 days (or purchase a similar fund now)?

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Re: Muni bonds are getting killed. Are you bailing out?

Post by fabdog » Tue Nov 15, 2016 10:22 am

Yes, you can sell and tax loss harvest, and deduct up to a net $3000 against your income (after offsetting any capital gains you may have)

You'd need to wait 30 days to go back into that fund, or you could go into another tax free fund immediately (probably not MA specific, but you could look at Vanguard's MA tax free and see if holdings are different, and dive in there)

Mike

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Re: Muni bonds are getting killed. Are you bailing out?

Post by FCM » Tue Nov 15, 2016 10:26 am

I'm planning to add to my already substantial position. I like to take advantage of lower prices.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by 9-5 Suited » Tue Nov 15, 2016 10:38 am

I love Jack Bogle's pragmatism on issues like this. The emotion to sell when the noise is bad is so core to human instincts that saying to ignore it is almost impossible (as evidenced by many recent posts on the board). He has said many times that if something like this concerns you deeply, make a small change. Not a big change. Never get OUT. Never BAIL. Decrease your allocation a bit, stay the course, sleep well, tune out all the prognostications.

I don't know if it's true or not, but Meb Faber cited a Fidelity study once that some of the best investors in their funds were investors who either forgot they have an account or had died. I took that as a funny little anecdote not to fiddle around too much :)

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Re: Muni bonds are getting killed. Are you bailing out?

Post by FoolStreet » Tue Nov 15, 2016 12:26 pm

fabdog wrote:Yes, you can sell and tax loss harvest, and deduct up to a net $3000 against your income (after offsetting any capital gains you may have)

You'd need to wait 30 days to go back into that fund, or you could go into another tax free fund immediately (probably not MA specific, but you could look at Vanguard's MA tax free and see if holdings are different, and dive in there)

Mike


I plan to do the same: TLH my Vanguard Muni funds. I will sell my CA Long Term and buy Intermediate Term. And i will sell my National TE limiteds and buy intermediates. This will keep my combined duration at intermediate according to my plan. After 60days, i will flip back. I *think* Vanguard requires a 60d restriction, even though the IRS requires 30d. From my research, it looks like these do not have a 6 mo restriction, which you would need to check for yours. (Daily vs monthly accrual).

Also, if one does this only for certain lots, then one must turn off auto reinvest for the lots not sold.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by INDUBITABLY » Tue Nov 15, 2016 2:09 pm

FoolStreet wrote:I plan to do the same: TLH my Vanguard Muni funds. I will sell my CA Long Term and buy Intermediate Term. And i will sell my National TE limiteds and buy intermediates. This will keep my combined duration at intermediate according to my plan. After 60days, i will flip back. I *think* Vanguard requires a 60d restriction, even though the IRS requires 30d. From my research, it looks like these do not have a 6 mo restriction, which you would need to check for yours. (Daily vs monthly accrual).


If you're referring to the frequent trading restrictions at Vanguard, they're down to a 30d restriction now, so it conveniently matches up with the IRS' wash sale rule.
"Ah ha! Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor!" - Dr. Zoidberg

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Gropes & Ray » Tue Nov 15, 2016 2:19 pm

I don't really understand bonds beyond their most basic function as a loan. Therefore, I just stick with whatever AA I more-or-less randomly selected when I started investing.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by villars » Tue Nov 15, 2016 2:54 pm

THanks for the heads up . I was not paying attention to Munis.

Per my AA, I need to buy bonds with next purchase . So I will be buying some Munis now that yield is going up slightly. My short term goal is to hit the 50,000 number on VWITX so I can get the Admiral version ( VWIUX is the ticker I think)

so to answer the OP: no .

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Re: Muni bonds are getting killed. Are you bailing out?

Post by math22 » Tue Nov 15, 2016 3:19 pm

Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.


bought today 40K worth of muni bonds

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Re: Muni bonds are getting killed. Are you bailing out?

Post by dratkinson » Tue Nov 15, 2016 3:55 pm

Radjob4me wrote:
INDUBITABLY wrote:I can't believe I'm writing this, but I will be tax loss harvesting my bonds. If you held corporates during the 2009 debacle, was this something that you did? I'm young enough that it still feels weird.


I was about to pose a similar question to this - I bought about 100k of Fidelity Mass Muni bond fund this summer as an alternative to saving in 529 plan and don't need the money for a few years and won't bail. But I can tax-loss harvest this fund due to the fall in NAV price, right? I had a good income year and so I could sell my position now for the $3500 loss and then repurchase in 30 days (or purchase a similar fund now)?


Determine from prospectus if Fidelity fund is "daily accrual", or not. Why? To protect TE dividend benefit. Otherwise wait >half-year to TLH.
See "Fine points about tax loss harvesting": https://www.bogleheads.org/wiki/Tax_los ... harvesting
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Re: Muni bonds are getting killed. Are you bailing out?

Post by Toons » Tue Nov 15, 2016 3:56 pm

Bail?
Yawn.
:happy
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Re: Muni bonds are getting killed. Are you bailing out?

Post by randomizer » Tue Nov 15, 2016 4:36 pm

soboggled wrote:
Van wrote:Apparently as a consequence of Trump becoming POTUS elect, municipal bonds are getting slammed much worse than corporate bonds and somewhat worse than treasuries. The main factors are reported to be: anticipated lowering of tax brackets, anticipated increase in inflation and an anticipated increase in muni issuance due to increased spending on infrastructure.

Are you riding it out or are you bailing now? This massacre might go on drip, drip, drip for a long time.

Don't really get that last one. If the feds increase infrastructure spending, shouldn't it help municipalities, albeit at the expense of federal taxpayers?

I think the basic idea is that state governments will be directed to increase expenditure, which means they'll need to issue munis to fund the expenditure, which will increase supply with no underlying increase in demand, which means that yields (of newly issued bonds) will have to go up in order to generate the demand, which means that prices (of previously issued bonds) will go down.

That may or may not be true, but it won't affect my plan which is to rebalance to maintain my AA, taking advantage of TLH opportunities along the way.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by itstoomuch » Tue Nov 15, 2016 4:57 pm

undecided.
Our taxable account holding the Muni fund is -2.5%, YTD, net. :?
However, the gold ETF is off -9.0% YTD, net :oops:

YMMV
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Re: Muni bonds are getting killed. Are you bailing out?

Post by SGM » Tue Nov 15, 2016 5:36 pm

The two muni bond funds that I have with Vanguard still have capital gains, so I couldn't tax loss harvest if I wanted to. I don't think short term that interest rates will go up much or necessarily stay up. If they do I will be happy as I won't be selling the bond funds anyway. I will probably buy some more bond funds in 2017. I am pretty much fully invested currently and won't be selling anything before 2017 unless I have an opportunity to tax loss harvest from my stock allocation.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by TigerNest » Tue Nov 15, 2016 6:31 pm

Honestly, yes. I just sold our entire position today. I've always been able to stay the course, but today was different.

I know it's a fallacy, but I think of our municipal bonds in a separate 'bucket' from our retirement funds. We're in our mid-30s, with plenty of time until retirement. I am able to keep my loss aversion in check for my retirement account funds in part because I think the odds that they'll recover from a decline by the time I need them are high (and if they don't recover well, I can work longer and adjust). Our retirement accounts are 80/20.

The municipal bonds, though, are for the nebulous near term. We'd like to buy a house one day, but can't afford one in the Bay Area. We'll probably move in a few years, though not sure when/where. Our risk tolerance for this money is very low.

I'm not sure where to put these assets. We're fortunate to be in the top federal tax bracket right now, and when you add California state taxes, 53% of any taxable interest income would be lost to taxes (that's the marginal rate).

So basically a 1-year CD would yield ~ 0.6% after tax, or $60 per $10,000 a year. That's not appealing. I figured Vanguard's CA muni fund was a safe way to get a bit more yield. Lesson learned.

The recent outsized decline in municipal bonds vs. taxable bonds make sense conceptually. Munis are not only being impacted by (a) greater expectations of modest interest rate increases, but also (b) the greater chances of tax reform, which could reduce top income taxes (thus impacting the tax equivalent yield) and potentially eliminate the municipal bond tax deduction at the federal level.

That last risk scares me, since it's event risk that is specific to municipal bonds. I'm ok with interest rate risk exposure -- after all, a CD experiences the same thing, but you don't see it without an active trading market. However, the other event risks have made me reconsider my municipal bond allocation entirely.

At this point, any suggestions on how to invest this money are welcome. We're kind of at a loss of what to do with it. Probably a 1-year CD. :-/
Last edited by TigerNest on Tue Nov 15, 2016 6:38 pm, edited 1 time in total.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by FillorKill » Tue Nov 15, 2016 6:37 pm

lostdog wrote:What happened with staying the course?

Be reasonable - it's been a week. :D

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Gnirk » Tue Nov 15, 2016 6:40 pm

No, I'm not bailing out of my muni funds. They are part of my IPS/ asset allocation, so I plan to stay the course, and ride this roller-coaster.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by dziuniek » Tue Nov 15, 2016 6:53 pm

TLH, TLH, TLH... :)

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Re: Muni bonds are getting killed. Are you bailing out?

Post by Artsdoctor » Tue Nov 15, 2016 7:18 pm

Yes! I bailed.

I made a large purchase about a month ago into the national intermediate muni fund and got CRUSHED! Consequently, I sold it at a loss--and moved it directly to the California intermediate fund.

If this downward spiral continues relentlessly, I will then bail again in December--right back into the national fund.

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Re: Muni bonds are getting killed. Are you bailing out?

Post by nisiprius » Tue Nov 15, 2016 8:09 pm

This is what you're talking about?

Source

Vanguard Intermediate-Term Tax-Exempt Fund

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Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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ClevrChico
Posts: 968
Joined: Tue Apr 03, 2012 8:24 pm

Re: Muni bonds are getting killed. Are you bailing out?

Post by ClevrChico » Tue Nov 15, 2016 8:27 pm

...And the last couple of days International has been up. I agree with the analysts that predict volatile times ahead. (For everything.)

I'll stay the course with my asset allocation, including muni bonds. If income tax changes make them non-optimal, I'll move them at that time. :sharebeer

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Riprap
Posts: 380
Joined: Thu Jan 29, 2009 2:08 pm

Re: Muni bonds are getting killed. Are you bailing out?

Post by Riprap » Tue Nov 15, 2016 8:38 pm

There is some trickiness involved with selling muni bonds at a loss:

If tax-free interest is received on shares held 6 months or less, which is subsequently sold at a loss, then the basis of the shares must be decreased by the amount of the exempt interest in calculating the loss (on Form 8949, Sales and Other Dispositions of Capital Assets). For instance, if the taxpayer's basis in a mutual fund is $50 per share, who then receives $5 per share as tax-exempt interest, then no loss can be claimed on the shares held 6 months or less unless the sale price is less than $45 per share.

http://thismatter.com/money/tax/mutual-funds-taxation.htm

TomCat96
Posts: 418
Joined: Sun Oct 18, 2015 12:18 pm

Re: Muni bonds are getting killed. Are you bailing out?

Post by TomCat96 » Tue Nov 15, 2016 8:59 pm

nisiprius wrote:This is what you're talking about?

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Vanguard Intermediate-Term Tax-Exempt Fund

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to be fair, that is a logarithmic graph you are using.

Intrepyd
Posts: 66
Joined: Thu Sep 25, 2014 6:34 pm

Re: Muni bonds are getting killed. Are you bailing out?

Post by Intrepyd » Tue Nov 15, 2016 9:02 pm

Not bailing out, but bailing "over." This thread prompted me to check on my unrealized losses and harvest them. I'm still in munis after the TLH, no reason to change my IPS right now!

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