Trading Municipal Bonds

Trading Municipal Bonds
By: www.ProfitableTradingTips.com

Trading municipal bonds may
sound like a contradiction in
terms. After all people who earn a
lot of buy municipal bonds to take
advantage of the tax exemption.
By: http://profitabletradingtips.com/profitable-trading-tips/trading-municipal-
bonds

Thus municipal bonds are
commonly a long term investment
that people only get out of, at or
shortly after retirement when their
yearly income falls off. On the
other hand trading profits
commonly occur during times of
volatility and when trading volatile
equities.
bonds

Here is where trading municipal
bonds comes in today. Check out
the news. The city of Detroit has
gone bankrupt. The fallout has
been far and wide as city after city
has delayed or called off its
municipal bond auctions.
bonds

And the US Federal Reserve is
planning to reduce the size of its
weekly Treasury bond purchases
which in turn is expected to raise
interest rates.
bonds

Thus there are two fundamental
factors that are expected to drive
interest rates and the values of
municipal and other bonds.
Technical analysis of prices may be
useful in profiting from this
apparent chaos in trading
municipal bonds.
bonds

Trading Bonds When There Is
Blood In The Street
bonds

A little over a year ago we wrote
about trading Euro Zone bonds.
The point of trading bonds instead
of investing in them is to profit
from widely fluctuating interest
rates no matter what the cause.
bonds

Higher rates in the Euro Zone last
year were because of the risk of
default by several nations across
the Southern flank of Europe.
Likewise in trading municipal
bonds today higher rates go with
the risk of default by cities.
bonds

In addition, the Fed bond buying
stimulus program was meant to
drive interest rates down and
stimulate economic growth, which
was successful. Now the Fed is
looking to taper off and there is the
likelihood of higher interest rates
across the board.
bonds

Although the Fed promises to go at
this slowly markets are still
unsettled. This is a variant of Baron
Rothschild’s blood in the streets
saying. (The best time to invest is
when there is blood in the
streets, especially your own.)
bonds

To make money on bonds in a
rising market the best choice is to
wait until rates rise unless you are
selling in anticipation of a rise.
bonds

However, in a volatile market rates
may go up and down and a savvy
trader could make money buying
at the top of a swing and selling at
the bottom in trading municipal
bonds.
bonds

When To Buy And When To Sell
bonds

An apt saying in regard to trading
municipal bonds in today’s market
is that the devil is in the details.
Trading municipal bonds
successfully in a fluctuating market
has to do with evaluating
individual municipalities and their
bond offerings.
bonds

When a city like Detroit goes belly
up its bonds become virtually
worthless. In such a situation a
trader can come in and pick up
bonds at pennies on the dollar.
bonds

Then the question is if one sells as
soon as things look better and
takes a small profit or waits for a
bigger cash reward.
bonds

As always do your own
fundamental and technical analysis
when trading municipal bonds and
stay out of the market if you do not
understand what is going on.
bonds

Trading Municipal Bonds

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Trading Municipal Bonds