How to Tell if You’re Getting A Good Muni Bond Price

It’s really quite easy. Remember when you buy a bond you’re really buying a yield, so all you have to do is compare the yield to maturity on one bond to others of the same quality and maturity. When you have done that, simply pick the one with the highest yield to maturity. But once again, be sure you’re comparing bonds of the same quality and maturity, because even a year shorter or longer will make a difference. That’s how the professional buyers at the big institutions compare prices.

So stop thinking like a stock investor and stop worrying about how much the dealer is making. Ask yourself if you would prefer a short term bond yielding 3.25% or a very similar bond yielding a 3.50% even though it may have more dealer profit. That’s an entirely possible scenario in the Muni market, and it happens everyday. For a better understanding of how and why, refer to our special educational report “The Reasons Stoever Glass is Known for Better Bond Prices.”