Triple B grade Muni Bonds

[KKF]

Re: Triple B grade Muni Bonds

@Southie

A guest in Consuelo Macks last week show stated** BBB Muni Bonds** have lower default rate than AAA Corporate bonds.

I was cutting onions when I almost cut my fingers upon hearing that.

The point he made - most people buy bonds for safety. But by going for safest munis, you sacrifice yield. Settling for BBB grade munis, you get Treasury type yields while saving federal and state taxes.

Of course all of this is dependent on the yield spread between various grade munis and say 10 yr treasury.

The price you pay matters.

At present munis yield 95 pct.of Equivalent Treasury yield. Normally it is 88 pct. So still relatively good value vs treasury in spite of good 2015.

This may belong in the Nuggets thread also. What say you, Business Moderators?

Thank you.

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