Post
by jhogue » Wed Jul 04, 2018 1:04 pm
Let the buyer beware! Marilyn Cohen is promoting the sale of municipal and corporate bonds in this book. These are not suitable for the HBPP.
1. Anyone tempted to buy munis because they are free of federal, state, and local taxes should read up on Puerto Rico and Chicago or ask pug chief for a tutorial on fiscal finance in the Land of Lincoln.
2. As for corporate bonds, about 20 years ago, I took Marilyn Cohen's advice (she writes a bond column for Forbes) and bought some really neat GMAC zero coupon bonds with a coupon of 7.65%. They tanked during the 2008-2009 recession, and while I eventually got out at a profit, it was a wild ride while GMAC was being bailed out by TARP and then converted into Ally Bank. Trust me, you don't want to go for that ride. Bonds should be boring, not exciting.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"