Village community development bonds

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  #16  
Old 04-11-2018, 12:27 PM
thetruth thetruth is offline
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Originally Posted by dave042 View Post
the stock market is where you make money. bonds don't offer you any protection from default. if too scared to pick individual stocks, go with an S&P or NASDAQ index fund. the fees on them are minimal. whatever you do, don't buy mutual funds. their fees are crazy high.
There are books on everyone of the things you mention.

Bonds don't offer any protection from default. If, you think it is worth what you will pay for it by reduced yield, you can purchase insured bonds.
Stocks? The term default, is not the proper ones BUT, KODAK-comes to mind. ENRON-comes to mind. BP was destroyed. GE has???

RE: MUTUAL FUNDS
I assume you are comparing them with ETFs. Each time you buy shares in an ETF you pay a COMMISSION. Commissions have dropped in recent years-IT HAS NOT ALWAYS BEEN $5.00. EVEN THE MANAGEMENT FEES-some companies with 401Ks etc get lower management fees on the same funds that others buy and pay full fees-diff is about 1/3 less. Vanguard with probably amung the lowest fees in the industry offers ADMIRALTY shares. With a balance of ?????? 50,000 in the funds I know about, the fees for the same fund drop by 1/3.
  #17  
Old 04-11-2018, 03:47 PM
784caroline 784caroline is offline
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I have owned these bonds since 2008 and they fit for me a good part of my tax free portfolio. The bonds that were being questioned by the IRS were the Recreation Bonds issued by the Villages but that objection has been dropped a few years back.

The Community Development Bonds are NOT the Recreation Bonds. These are the bonds that are attached to each and every new house in The Villages that pay for the infrastructure supporting that particular VCCD District. They are not insured BUT you and I live here and you certainly dont see many foreclosures on homes never mind people not paying their bonds. In fact many people pay these bonds back early. You are guaranteed the first 5 years of interest payments which are made twice a year. After the first 5 years depending upon how many of the bonds have been prepaid by the homeowners in that District, the VCCD can randomly call via a lottery system which particular bond (in $5K increments) to call in early at par. SO if you paid 100 for the bond you would get 100 back...if you paid 95 for the bond you would get 100 back. It is very likely the vast majority of these bonds will be called in 10 years from issue date...ie never reach maturity ..you in essence are getting long term rates with a good chance it will be a short term play ie less than 10 years.

I have tried to buy these bonds either as new issue or on the after market from 3 different brokers...they could not get them. Note these bonds will fluctuate in price but you will not lose any money (unless you sell below par) but you will still get your semi annual dividend payment Federal TAX FREE. If you bought the bonds at par(100) or less you will at least get your money back when or if the bonds are ever called early or even at the 10 year mark.

These Bonds can be bought through FMS BONDS in Boca Raton Contact Edie Nasello at 1-800-741-1103. They get a good majority of these after market bonds via estate settlements.

BTW...with bond funds (Vanguard/Fidelity etc) you can lose money if interest rates rise because you have no specific maturity date upon which the individual bonds can be redeemed.

Any questions on these bonds send me a PM.
  #18  
Old 04-12-2018, 02:58 PM
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daca55 daca55 is offline
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Great post! Very informative concerning my original post. I PM you.
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