This morning on CNBC they had a blurp about Puerto Rican 2004 AAA General Obligation Bonds yielding 12% (18.5% taxed equivalent). I think some of these prices on bonds are just ridiculous. What is the best way to play these? Buy the bonds outright? Buy a MF that specializes in muni's? Is it too early to buy here?
It is a 2024 maturity and is an auction rate bond with a failed auction. Don't consider buying these unless you want to own them until 2024 or until the auctions stop failing.
Muni's are buy and hold, that's for sure. I used to sell them. Either buy outright or don't bother. A fund that only buys bonds is a joke after fees. Bonds were designed to provide regular income. That's it. Don't buy this thinking your principal is going to explode. It'll probably be under water for a bit actually.
brownsfan....since you followed munis do you know if PR is on the verge of bankruptcy? i haven't even bothered to keep up with it. i just did a quick google and saw they were bleeding money 2 years ago. do you know of anything more up to date?