Author Topic: MA Municipal Bond fund? and, how to sell it?  (Read 4882 times)

nassoro

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MA Municipal Bond fund? and, how to sell it?
« on: September 24, 2012, 04:10:38 AM »
I've got a CD coming due.  Even with a "rollover bonus"  I'm looking at really low interest rates.  I also have an extremely risk averse spouse.  While the CD is a worthwhile amount of money, for sure, it's not our entire cash reserve. 

I'm contemplating a phased move into Fidelity Massachusetts Municipal Income Fund(FDMMX) or the Vanguard equivalent of VMATX - 10k now to start, and more every 6 months.  As a Mass resident (well, taxpayer - we just moved out of the country, which raises questions for another post), that should give us some decent, stable returns.  Being largely tax free is a nice side effect, but not essential. 

My questions:  Anyone have any personal experience with these funds? Are there comparable funds out there with lower expenses? And most importantly, how best to sell it at home compared to the guaranteed but paltry returns from a CD or (horrors!) savings account to someone that would store it all under the mattress if it wasn't for the lumps? 
« Last Edit: September 24, 2012, 05:50:54 AM by nassoro »

nassoro

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Re: MA Municipal Bond fund? and, how to sell it?
« Reply #1 on: September 25, 2012, 12:33:51 PM »
Any feedback on municipal bond funds in general?

velocistar237

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Re: MA Municipal Bond fund? and, how to sell it?
« Reply #2 on: September 25, 2012, 02:09:16 PM »
No, but you piqued my interest. Take a look at this Boglehead forum post.

tooqk4u22

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Re: MA Municipal Bond fund? and, how to sell it?
« Reply #3 on: September 25, 2012, 03:20:54 PM »
Any feedback on municipal bond funds in general?

I read an aricle today about how banks have significantly increased their holdings of munis over the last 2-3 years to put their excess (there a lot) deposits to work and improve their income statements.  The muni market is $3.7 trillion and banks now hold about 10% of that.

I don't know if it is healthy or not  but when you get a bunch of demand from a group that is normally invested in that segment it usually ends badly from a return standpoint. 

Also be sure it makes sense to be in munis - it only makes sense if your income is high enough to get the effective tax benefits.

Kriegsspiel

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Re: MA Municipal Bond fund? and, how to sell it?
« Reply #4 on: September 25, 2012, 09:30:37 PM »
I used to think that munis made a lot of sense, until I read more into it.  First, would it be true to say that the market usually prices the munis where their tax savings/return equals the return of a regular bond without tax savings?

Second, munis can be called if it is in the interest of the government to do so.  I'm not sure how often this happens, does anyone know?

nassoro

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Re: MA Municipal Bond fund? and, how to sell it?
« Reply #5 on: September 26, 2012, 07:33:31 AM »
Thanks! The boglehead thread is interesting indeed.  I was thinking of Mass muni just because I know them a little better than a general fund, and the historical return is decent, but I'm certainly no fund manager.  For the scale I'm looking at, both the income and the tax aren't that big, so perhaps I'll go with something like VMLTX and not think about the tax side.

ivyhedge

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Re: MA Municipal Bond fund? and, how to sell it?
« Reply #6 on: October 03, 2012, 12:25:31 PM »
Thanks! The boglehead thread is interesting indeed.  I was thinking of Mass muni just because I know them a little better than a general fund, and the historical return is decent, but I'm certainly no fund manager.  For the scale I'm looking at, both the income and the tax aren't that big, so perhaps I'll go with something like VMLTX and not think about the tax side.

Hi, Nassoro,

I'm a MA resident and would be happy to discuss some elements of the Vanguard fund with you offline. Some characteristics of the fund are important and easily overlooked by the "go Vanguard [or Fidelity or T. Rowe] and damn all else!" crowd.

grantmeaname

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Re: MA Municipal Bond fund? and, how to sell it?
« Reply #7 on: October 08, 2012, 03:46:44 PM »
I'd be curious to here if you were willing to discuss it online. At the very least, if you're not willing, do you have a link to a blog or something you can point to that's the gist of what you're saying?