In my taxable account, my bonds are mostly held in Vanguard's Intermediate Term Tax Exempt (National munis) and Vanguard's New York Long Term Tax Exempt (NY munis).
http://www.morningstar.com/funds/XNAS/VNYTX/quote.html
Should I get out of the New York Tax Exempt Long Term?
With interest rate risk and the Fed raising rates, I'm just wondering if I should put my bond money into Short Term bonds or TIPS or something else.
Should I get out of New York Long Term Tax Exempt (Munis) ?
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Re: Should I get out of New York Long Term Tax Exempt (Munis) ?
Is there a shorter term tax-exempt bond for NY? If not, I'd probably keep it for the state tax benefits.
Remember that bonds do lose some value as interest rates go up, but they also start paying you more for the same reason - because interest rates have gone up.
Remember that bonds do lose some value as interest rates go up, but they also start paying you more for the same reason - because interest rates have gone up.
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Re: Should I get out of New York Long Term Tax Exempt (Munis) ?
The interest rate risk wouldn't bother me at all. In fact it doesn't, as I own shares in the equivalent Vanguard Ohio Long-Term Tax Exempt (VOHIX). I'm assuming it's a medium-to-long-term holding and not for a short-term expense. If long-term rates rise gradually, it'll ultimately be good for our returns.
Since there is no NY state intermediate fund, if you do want to dilute your interest rate risk, you could use the (national) Vanguard Limited-Term Tax Exempt instead of the Intermediate Term Tax Exempt. You'd keep the state tax benefits on the higher yielding fund, but reduce your interest-rate risk on the national fund.
Since there is no NY state intermediate fund, if you do want to dilute your interest rate risk, you could use the (national) Vanguard Limited-Term Tax Exempt instead of the Intermediate Term Tax Exempt. You'd keep the state tax benefits on the higher yielding fund, but reduce your interest-rate risk on the national fund.
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Re: Should I get out of New York Long Term Tax Exempt (Munis) ?
Ok, thanks. I'll look into that Limited Term tax Exempt .
Re: Should I get out of New York Long Term Tax Exempt (Munis) ?
Something else to consider - the average duration of this fund is 6 - 10 years. That's not that "long".
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Re: Should I get out of New York Long Term Tax Exempt (Munis) ?
Agreed. The maturities are longer, but because (1) many have higher coupons from several years ago and (2) most have call provisions, the effective maturity and durations are not all that long.
The caveat is that if there were a huge increase in long-term muni rates, such that call provisions suddenly became unlikely to be exercised, you'd see the duration spike. For for small increases, of the sort that are more likely, the current modest duration reflects likely interest-rate volatility.
Re: Should I get out of New York Long Term Tax Exempt (Munis) ?
Remember that the market is aware of the Fed's plans, and those expectations are already priced into bonds.JimmyJammy wrote: ↑Wed Dec 13, 2017 1:57 pm Should I get out of the New York Tax Exempt Long Term?
With interest rate risk and the Fed raising rates, I'm just wondering if I should put my bond money into Short Term bonds or TIPS or something else.
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- Joined: Sat Oct 26, 2013 1:08 pm