• 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5

Tax free bond fund

A little over 3 years ago I started buying FTABX I have been putting money into it a few times a year. It pays me $100.00 a month but the fund is down 5%, I don't think I have ever seen it to be on the plus side is this normal or should I sell it and move it so thing else?
In my Brokerage account I have reduced my tax free ETF funds in favor of individual bonds issued by my home state.  These short to medium term bonds have less interest rate risk and produce tax free dividends as my state sports a pretty high state income tax which is likely to get worse with the Democrats winning over both the legislative and executive branches.  They are already talking instituting local option sales tax even before being sworn in. 
Rising rates kill bond funds. Corny has the right idea, laddering individual bonds is smart in a rising rate environment. The question is when do rates stop rising so you can lock in higher rates for when they go the other way.
I agree with MrRichLife.  If rates continue climbing your bond fund will continue to decline.  No fun!  Buying individual bonds (or CDs) will protect you from that decline.  The yields for government treasuries aren't bad either. 

Forum Jump:

Users browsing this thread: 1 Guest(s)