CA Muni Bonds Recommendations

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InvestVS
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Joined: Fri Jan 05, 2018 3:19 pm

CA Muni Bonds Recommendations

Post by InvestVS » Thu Sep 13, 2018 2:00 am

Hi,

I am not an experienced investor in Bonds and just own BNDX in my portfolio. How bond % allocation in my AA is low and I need to increase it. I live in California and my income tax is in highest rate so someone suggest me to buy CA Muni Bonds. As I have never purchased Bonds before, seeking advise to choose which CA Muni Bond to buy. Also should I Bond or Bond MF or Bond ETF? Please suggest same recommendations!!!

Thanks!

TxInjun
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Joined: Fri May 29, 2015 12:05 pm

Re: CA Muni Bonds Recommendations

Post by TxInjun » Thu Sep 13, 2018 2:38 am

At Fidelity, you can get an iShares ETF with ticker “CMF”.

TxIn

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randomizer
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Re: CA Muni Bonds Recommendations

Post by randomizer » Thu Sep 13, 2018 3:26 am

Similar thread: Which Vanguard CA municipal bond fund?

I'd look at VCADX (Vanguard California Intermediate-Term Tax-Exempt Fund Admiral Shares). Also available as investor class shares, with a lower minimum but higher expense ratio: VCAIX.
87.5:12.5, EM tilt — HODL the course!

InvestVS
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Re: CA Muni Bonds Recommendations

Post by InvestVS » Thu Sep 13, 2018 4:24 pm

Thanks for the responses!

Is based upon the knowledge that interest rates will be rising, it is still a good idea and time to invest some money in CA Muni Bonds or Muni Funds for diversification purpose or REITs will be better options. I have a high allocation in stocks and need to reduce that, I am 44 and currently have only 7.1% in bond funds and 4.3 % in alternates (REIT).

Thesaints
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Re: CA Muni Bonds Recommendations

Post by Thesaints » Thu Sep 13, 2018 4:27 pm

Check your actual return after taxes for the CA fund and for other states, or multi-state equivalent, if it exist.
CA top rate is 9.3% so a small difference in yield can make up for it.

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grabiner
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Re: CA Muni Bonds Recommendations

Post by grabiner » Thu Sep 13, 2018 8:09 pm

InvestVS wrote:
Thu Sep 13, 2018 4:24 pm
Is based upon the knowledge that interest rates will be rising, it is still a good idea and time to invest some money in CA Muni Bonds or Muni Funds for diversification purpose or REITs will be better options.
Bond traders already know that interest rates will be rising, and they trade bonds at prices which reflect that; this is why long-term bonds yield more than short-term bonds. (Also, the rates that will be rising are short-term rates, not the rates on the intermediate-term and long-term bonds you are considering.)

REITs are not an alternative to bonds. They are stocks, and are subject to the risk of the stock market. You might hold some REITs to diversify your stock portfolio (I do), but you should hold enough bonds to decrease the risk level of your portfolio to an appropriate level.

In addition, REITs should not be held in the account in which you might buy munis. REITs generate large tax bills, and should only be held in an IRA.
Wiki David Grabiner

PFInterest
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Re: CA Muni Bonds Recommendations

Post by PFInterest » Sat Oct 27, 2018 8:25 pm

Thesaints wrote:
Thu Sep 13, 2018 4:27 pm
CA top rate is 9.3%
its not....
https://www.tax-brackets.org/californiataxtable

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