https://www.morningstar.com/articles/961786/should-you-own-a-muni-fund
Should You Own a Muni Fund?
Unless you're in one of the highest tax brackets, the tax advantages might be smaller than you think.
Amy C. Arnott, CFA
Jan 15, 2020
Investors have been pouring money into municipal-bond funds. For the trailing one-year period ended November 2019, inflows into all municipal-bond fund categories totaled about $95 billion--the highest annual inflow since 2009. Taxable-bond funds still hold far more assets overall, but municipal-bond funds have been gaining ground, with nearly $850 billion in total assets as of Nov. 30, 2019. The appeal of these funds is largely based on their tax-advantaged status. In the wake of the 2018 tax law changes, fewer people can itemize deductions, which makes investment vehicles that help reduce taxable income more compelling
Another key question is whether to invest in individual bonds or in a diversified mutual fund. If you have a brokerage account, you can generally buy individual municipal bonds in increments as low as $5,000. But while transaction costs for trading municipal bonds have declined significantly, they're still relatively high. The Municipal Securities Rulemaking Board estimates that the average spread between buy and sell prices was about 80 basis points for retail investors as of April 2018. These transaction costs would eat up much of the tax advantage of holding individual bonds unless your portfolio is large enough to buy bonds in larger increments. Even then, you'd probably need to buy at least 20 higher-quality bonds to help mitigate bond-specific risk. And because the municipal-bond market is notoriously opaque and illiquid (though less so than it used to be), you should also plan on holding any individual bonds until maturity.
We have been doing the later past 10 or 12 yrs, buying private muni and corp bonds
Could not have been happier
Just monitor the bonds carefully and looking at bond cusip/credit reports/ (see which funds/etf dump the bond) routinely to prevent any bankruptcy

https://www.cnbc.com/2020/01/13/this-was-the-best-strategy-for-picking-stocks-the-last-10-years.html
This was the best strategy for picking stocks the last 10 years
Picking stocks with high dividend yields was the best strategy for investors over the last decade, Bank of America said.
Low interest rates and steady economic growth made dividend stocks attractive, even the riskier ones with the highest yields.
The strategy would not have worked in 2019, when the S&P 500 outperformed high yielding stocks.
Wonder if this would work next 30 yrs...

NHMAX+ORNAX had a great run in 2019. LT bonds isn't a category I usually use because of higher volatility. My goal is to stay within lower volatility funds but still make a good return. HY Munis also have tax-advantaged over LT bond.
Lastly, if you read any reasonable book, article, advice about bonds, their recommendation is to stay with inter-term duration for a good reason.

Hmmm...yet you routinely post here and elsewhere that you make (sic) "guerrilla trades" of, you know, stocks. Aren't stocks more volatile than LT bonds?

Is the above has anything to do with the subject of this thread "Muni Bond party should continue in 2020' ?
Did I post anything about my trades in this thread?

Read, "Well, I guess you got me there."

NHMAX+ORNAX had a great run in 2019. LT bonds isn't a category I usually use because of higher volatility. My goal is to stay within lower volatility funds but still make a good return. HY Munis also have tax-advantaged over LT bond.
Lastly, if you read any reasonable book, article, advice about bonds, their recommendation is to stay with inter-term duration for a good reason.

Hmmm...yet you routinely post here and elsewhere that you make (sic) "guerrilla trades" of, you know, stocks. Aren't stocks more volatile than LT bonds?

Is the above has anything to do with the subject of this thread "Muni Bond party should continue in 2020' ?
Did I post anything about my trades in this thread?

My impression is that PIMCO generally uses derivatives to boost income as opposed to using them to mitigate risk. Likewise, it can be more aggressive with junk bonds.
Foreign exposure? PIMIX is weighted negative 30% in non-USD developed markets. It is also 14% long in emerging markets.
See excerpts below from the funds' prospectuses and fact sheets. They may be meaningful or may signify nothing. Reading these docs is like reading tea leaves. They can mean whatever you want to read into them. For your amusement to compare and contrast.
Objectives:
PIMIX: The Fund’s primary investment objective is to maximize current income.
Long-term capital appreciation is a secondary objective.
RPIEX: The fund seeks high current income.

Investment strategies:
PIMIX: The Fund seeks to achieve its investment objectives by investing under normal circumstances at least 65% of its total assets in a multi-sector portfolio of Fixed Income Instruments of varying maturities, which may be represented by forwards or derivatives...
RPIEX: The fund also uses [derivatives], primarily to manage interest rate exposure and limit the fund's overall volatility.
High yield (junk) bonds:
PIMIX: The Fund may invest up to 50% of its total assets in high yield securities rated below investment grade by [an NRSRO] or if unrated, as determined by PIMCO (except such 50% limitation shall not apply to the Fund’s investments in mortgage- and asset-backed securities). [Note that 77.6% of the fund is presently in securitized debt.]
RPIEX: The fund focuses mainly on holdings that are rated investment grade .... However, the fund may invest up to 30% in high yield bonds, also known as junk bonds, and other holdings (such as bank loans)
Fund home pages (with links to fact sheets, prospectuses, etc.)
PIMIX: https://www.pimco.com/en-us/investments/mutual-funds/income-fund/inst
RPIEX: https://www.troweprice.com/personal-investing/tools/fund-research/RPIEX

My own portf. gives me good growth AND income. We'd all like to see higher income. I have bonds in my PRWCX (and soon, VLAAX) but my 3 dedicated bond funds yield an average of 3.726% among them. PTIAX, RPSIX, PRSNX. RPSIX also serves up a small capital gain at the end of the year. I suppose that's included in the yield statistic. Eventually, I might add PTIMX. (Munis.) And I don't worry that my risk is too great.

Boost Your Retirement Income With Tricks The Pros Use
https://www.investors.com/etfs-and-funds/retirement/retirement-income-strategy-pros-use/
Finding retirement income is still a challenge. Interest rates remain low. But you can borrow a key trick financial advisors use to solve this puzzle.
For every $100,000 you invest in this group of funds, you could have created. Bond Fund (PEBIX) for a 4.5% yield plus gains from the bond prices."

I agree withe the basic premise of the article but then maybe because I'm a dividend growth investor I tend to be biased. According to Ned Davis Research, from 1972 to 2018 dividend growth stocks outperformed the broader market by 2.3% CAGR and with 12% less volatility. If one invests in a company with sufficiently stable cash flows to generate a long dividend growth streak (e.g. Dividend Aristocrat) they are less likely to bail during times of increased market fear. I am in it for the income and patient enough to buy these stocks when they get trashed for no discernible reason. While no dividend stock is a true bond alternative, quality dividend growth stocks (like the famous aristocrats) tend to have much lower volatility over time. Volatility, dividend growth, quality, and value are four proven alpha factors that have beaten the market over the long term.
I was intrigued enough to seek out the Goldman Sachs basket and found this article below. Apologies if it's been linked before.
Goldman Basket Possibilities
Edit: and I suppose I should back up that Ned Davis statement with a reference.
Long Term Performance of Dividend Paying Stocks

Many nearing retirement seem unaware of the IRS “Catch-up“ provisions. Appears current law allows persons over 50 who were unable to fully fund their retirement plan in prior years to make generous catch-up contributions later on in addition to the current yearly limit. I’m unclear whether it pertains to IRAs, but it appears that at least in some cases it does. My experience more than 2 decades ago (with a 403-B) may no longer be representative. But in my case the “catch-up“ came in darned handy in shoring-up earlier insufficient contributions as retirement neared.
Quick search pulled up 3 reads:
https://www.investopedia.com/terms/c/catchupcontribution.asp - Invesropedia / general description
https://www.irs.gov/retirement-plans/401k-plan-catch-up-contribution-eligibility - IRS / 401K
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions - IRS / mentions IRAs - but I’m unsure of types and amounts.
PS - I should have read John’s article first: “ The maximum amount you can contribute to a traditional IRA for 2020 is $6,000 if you're younger than age 50. Workers age 50 and older can add an extra $1,000 per year as a "catch-up" contribution, bringing the maximum IRA contribution to $7,000. You must have earnings from work to contribute to an IRA, and you can't put more into the account than you earned.”
Perhaps my added emphasis may be helpful to some. :)
From Simon - “Inflation (Consumer Price Index) was up 2.1% in 2019 as of last November” -
While that sounds trite in the face last year’s near 30% return on the S&P, it really depends on perspective. A 2% rise in cost of living (if you believe the numbers) would look quite different following a 30% decline in equities, especially if bonds languished or fell in value. And even at 2% a year, over 5 years you’re looking at well over a 10% increase in COL. (Remember that inflation compounds in a manner similar to how interest does.)

A couple more factoids:
- M* rates it bronze; though I have my doubts about how much intelligence there is in M*'s artificial "intelligence" ratings (done by machine, not analyst)
- Its 165% turnover rate is not a mere artifact of being a bond fund. 90%+ of the cap gains it has distributed in the past four years are short term. On the other hand, it distributed no cap gains in two of those four years (losing years, perhaps?)
The fund did well out of the gate, for its first two years, but has been essentially flat over the past three. My guess is that the star rating will nevertheless go up in a couple of weeks when the fund hits the five year mark. The way M* calculates stars is to compute a weighted average of a fund's three year rating, its five year rating (if available), and its ten year rating (if available). The two good years of the fund aren't getting counted because the fund is just short of five years. In a couple of weeks that will change, and those good years will be included.
To continue the fund description that Lipper quoted from T. Rowe Price:
The fund also uses interest rate futures, interest rate and credit default swaps, and forward currency exchange contracts, primarily to manage interest rate exposure and limit the fund's overall volatility.
If I'm going to buy a nontraditional fund that uses these techniques to manage interest rate risk and volatility, I'll buy one that does it well: FPNIX. It doesn't seek high current income, just the opposite (though it still sports a very similar SEC yield of 2.59% vs. 2.69% for RPIEX). Slow and steady wins the race.
Here's a chart comparing their performance over the lifetime of RPIEX.

This month Jan. 2020, I've added a number of bond institutional class OEFs in my main brokerage account. Besides high yield munis, they fall in the multisector or flexible categories. Sold two BL OEFs Fall 2018. As of Friday, the NAV of one of them is 20% lower than my selling price. I am not a bargain hunter and skeptical of interest rate predictions, so I will avoid that niche for the time being.

Thanks, John.
Inflation (Consumer Price Index) was up 2.1% in 2019 as of last November, so it's not surprising that IRA contributions would remain the same for 2020. Some years (in fact most years) I struggle to find the max to contribute anyway!
IRA contribution limits last increased by $500 for tax year 2019. With inflation so low I wouldn't bank on another increase for 2021. The increase for 2019 was the first since 2013.

https://www.cnbc.com/2020/01/11/wall-street-strategists-recommend-stable-dividend-paying-investments.html
Dividend stocks look attractive with a volatile year that nets measly returns expected ahead
KEY POINTS
Unlike growth stocks, dividend stocks typically don’t offer dramatic price appreciation, but they do provide investors with a steady stream of income.
This type of strategy can bode well for investors in a much riskier year ahead grappling with Middle East unrest and a U.S. presidential election.
Wall Street market analysts largely see much more modest returns in 2020 following a historic run last year. The average year-end target for the S&P 500 comes to 3,345, a measly 2% gain.
A slew of banks including Goldman, UBS and Bank of America started advising clients to shift to dividend-paying stocks and strategies to hedge against rising risks and seek outperformance.

https://finance.yahoo.com/news/much-contribute-traditional-ira-2020-195814096.html
How much you can contribute to traditional or roth ira 2020
Unfortunately for retirement savers, the maximum amount that can be contributed to a traditional IRA in 2020 remains the same as it was in 2019. Let's hope the limit is increased for 2021.
IRA Contribution Limits for 2020
The maximum amount you can contribute to a traditional IRA for 2020 is $6,000 if you're younger than age 50. Workers age 50 and older can add an extra $1,000 per year as a "catch-up" contribution, bringing the maximum IRA contribution to $7,000.

I'd thought I make a second comment about this months edition of Dr. Madell's newsletter.
I find it interesting that Dr. Madell chose five year periods for his study to determine what the next five years might offer investors. This is because I use a rolling five year period to determine what my portfolio's distributions will be. What I do is take (up to) a sum equal to what one half of my five year aveage returns have been as a retirement distribution and I have also found that principal grows over time by leaving the other half for capital formation. This is the way I ran my parents money years back (when they were retired) and it worked well for them growing their principal over time while providing them income to live off of. With this, I figured well if it "aint" broke why try to fix it. Thus, I do the same for me and my wife.
Thank you Dr. Madell @tmadell for writting about your five year study concerning capital formation as I found it to be extremely interesting.
Cordially,
Old_Skeet

This post is about Bank Loan/Floating Rate bond oefs. This category of bond oefs is being mentioned more often for a 2020 investment, after a good 2019 performance. Typically these funds perform very well in rising interest rate and flat rate markets, and so the 2019 market was supportive, and 2020 is projected to be a flat interest rate period. They generally get punished in a falling interest rate environment. This is a sector of HY Bond funds, with the average fund in this category will have a credit rating of B and about 7.5% of its total portfolio in investment grade categories. The average standard deviation in this category is about 2.77, and the risk level in this category is highly correlated with how much yield the fund earns, with the assumption that junkier bonds pay higher yield. With that background, one might wonder if there is any bond oefs in this category, that might appeal to a more conservative investor. I did some searching in this category and I found 3 funds that a conservative investor might be interested in. The following 3 funds are offered for consideration for the conservative investor:
1. RCRIX/RCRFX: This fund has a standard deviation of 1.0, almost 1/3 of the category average, has a portfolio with a credit rating of BB compared to the typical B rating, has 21.4% of its portfolio in investment grade assets compared to the typical 7.5%, and in the strong downmarket of 2018 this fund was in the top 2% percentile of performance.
2. MWFLX/MWFRX: This fund has a standard deviation of 2.18, has a portfolio with a credit rating of BB, has 24.2% of its portfolio in investment grade assets, and in the 2018 downmarket it was in the top 15% percentile of performance.
3. FRSAX/FFRSX: This fund has a standard deviation of 2.34, has a portfolio with credit rating of B, has 24.7% of its portfolio in investment grade assets, and in the 2018 downmarket it was in the top 22% percentile of performance.
I use to invest in this category quite a bit in the past, but exited this category early in 2018. I have thoughts about re-entering this category in the future, when rising interest rates look more likely, but have considered a small investment in 2020 because of a projected flat market. RCRIX and MWFLX are 2 funds I would consider due to their strong performance history in downmarkets,their portfolios having a higher credit rating of BB, and because they have over 20% of their portfolios in investment grade assets.

What Schwab says when placing a test order:
1. This BUY order will be executed 01/13/2020.
2. This buy order does not have a transaction fee.
3. This buy order will be subject to a short term redemption fee if redeemed within 90 days.
4. This fund has a 1 % redemption fee if sold within 60 days.
A wild guess, with nothing to substantiate it, is that perhaps it is not marked as NTF because the fund is not paying Schwab the full fee it charges for NTF/OneSource marketing. But it is still paying Schwab some amount for shelf space, and Schwab for whatever reason is still selling it without charging a transaction fee.

https://www.forbes.com/sites/kenrapoza/2020/01/10/best-countries-for-fixed-income-in-2020/?ss=markets#5b37112930d2
Best Countries For Fixed Income In 2020
Forbes
That means the passive index funds will basically be mandated to buy. More money flowing into China bonds pushes up bond prices
Unless you’re happy with junk bonds and 2% yield on ten-year Treasury debt, then the best place for fixed-income investors is outside of the advanced economies. That’s always been the case, but they have been avoided, for the most part, due to risk and the fact that quantitative easing made the U.S. the only game in town since 2009.

@dtconroe - please read my post. An investor will be charged more than 1.45%.
From the Semi-annual report, dated Sept 30, 2019: "The Fund's total annual operating expense ratio in effect as of period end were .... 1.45% for Class A shares."
Note that the summary prospectus (July 31, 2019) says that the "Other Expenses" component of the ER "include[s] interest expense of 0.55%. Interest expense is borne by the Fund separately from the management fees paid to ... PIMCO." It goes on to say that if one backs out these interest expenses (which the fund pays), the ERs would be lower. That's how M* gets the adjusted ER.
Fee waivers have nothing to do with the ER adjustment for PONAX. The prospectus says that
"PIMCO has contractually agreed, through July 31, 2020, to reduce its supervisory and administrative fee for the Fund's I-3 shares by 0.05% of the average daily net assets attributable to I-3 shares of the Fund." There is no similar fee waiver and/or expense reimbursement for PONAX (class A shares) to subtract.
Finally, the reason why I say that investors are charged more than 1.45% is because in addition to the stated ER expenses borne by the fund, the fund also pays transaction costs on trades.

Hi @Gary1952,
Welocme to MFO.
Thank you for your question.
This should help provide an understanding of how I govern my portfolio along with how the pieces fit into a master portfolio. The hybrid income sleeve is a big part of my portfolio and is detailed below.
Consolidated Master Portfolio & Sleeve Management System ... Last Revised on 12/31/2019
Now being in retirement here is a brief description of my sleeve management system which I organized to better manage the investments held within mine and my wife's portfolios. The consolidated master portfolio is comprised of two taxable investment accounts, two self directed retirement accounts, a health savings account plus two bank savings accounts. With this, I came up with four investment areas. They are a Cash Area which consist of two sleeves ... an investment cash sleeve and a demand cash sleeve. The next area is the Income Area which consist of two sleeves ... an income sleeve and a hybrid income sleeve. Then there is the Growth & Income Area which has more risk associated with it than the Income Area and it consist of four sleeves ... a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. Then there is the Growth Area where the most risk in the portfolio is found and it consist of five sleeves ... a global growth sleeve, a large/mid cap sleeve, a small/mid cap sleeve, an other investment sleeve plus a special investment (spiff) sleeve. The size of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds held and their amounts. By using the sleeve management system I can get a better picture of my overall investment landscape. I have found it beneficial to Xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly for analysis. All my funds with the exception of those in my health savings account pay their distributions to the Cash Area of the portfolio. This automatically builds cash in the Cash Area to meet the portfolio's disbursement needs (when necessary) with the residual being left for new investment opportunity. Generally, in any one year, I take no more than a sum equal to one half of my portfolio's five year average return. In this way principal builds over time. In addition, most buy/sell transactions settle from, or to, the Cash Area with some net asset exchanges between funds taking place. My rebalance threshold is + (or -) 2% of my neutral allocation for my Income Area, Growth & Income Area and Growth Area while I generally let the Cash Area float. However, at times, I can tactically position by setting a target allocation that is different from the neutral weighting to overweight (or underweight) an area without having to do a forced rebalance. I do an Instant Xray analysis of the portfolio quarterly and make asset weighting adjustments as I feel warranted based upon my assessment of the market(s), my goals, my risk tolerance, my cash needs, etc. I have the portfolio set up in Morningstar's portfolio manager by sleeve, by each area and the portfolio as a whole for easy monitoring plus I use brokerage account statements, Morningstar fund reports, fund fact sheets along with their annual reports to follow my investments. In addition, I use my market barometer and equity weighting matrix system as a guide to assist me in throttling my equity allocation through the use of equity ballast, or a spiff position, when desired. I also maintain a list of positions to add (A) to, to buy (B), to reduce (R), or to sell (S). Generally, funds are assigned to a sleeve based upon a best fit basis. Currently, my investment focus is to position new money into income generating assets. The last major rebalanced process was started during the 4th Quarter of 2018 and was completed in the 1st Quarter of 2019 along some sleeves being reconfigured along with the movement to a new asset allocation.
Portfolio Asset Allocation: Balanced Towards Income ... 20% Cash, 40% Income, 30% Gr & Inc and 10% Growth
CASH AREA: (Weighting Range 15% to 25%, Neutral 20%, Target 15%, Actual 14%)
Demand Cash Sleeve ... Cash Distribution Accrual & Future Investment Accrual
Investment Cash Sleeve ... MMK Funds: AMAXX, TTOXX, PCOXX, CD Ladder & Savings
INCOME AREA: (Weighting Range 35% to 45%, Neutral 40%, Target 40%, Actual 39%)
Income Sleeve: BLADX(A), FLAAX(B), GIFAX, JGIAX(A), LBNDX, NEFZX, PGBAX, PONAX & TSIAX
Hybrid Income Sleeve: APIUX(A), AZNAX(A), BAICX, CTFAX, DIFAX, FBLAX, FISCX, FKINX, FRINX(A), ISFAX, JNBAX & PMAIX
GROWTH & INCOME AREA: (Weighting Range 25% to 35%, Neutral 30%, Target 30%, Actual 32%)
Domestic Equity Sleeve: ANCFX, FDSAX, INUTX(A) & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, HWIAX & LABFX
Global Equity Sleeve: CWGIX, DEQAX, DWGAX(A) & EADIX
Global Hybrid Sleeve: CAIBX, TEQIX & TIBAX
GROWTH & OTHER ASSET AREA: (Weighting Range 5% to 15%, Neutral 10%, Target 15%, Actual 15%)
Large/Mid Cap Sleeve: AGTHX, AMCPX & SPECX
Small/Mid Cap Sleeve: AOFAX, NDVAX & PMDAX
Global Growth Sleeve: ANWPX, NEWFX & SMCWX
Other Investment Sleeve: KAUAX(A), LPEFX & PGUAX
Equity Ballast & Spiff Sleeve: No position held at this time.
In addition, my all weather asset allocation might be of some interest to you as well. Below is my blurb arbout it.
Old_Skeet's All Weather Asset Allocation.
My all weather asset allocation of 20% cash, 40% income and 40% equity affords me everything necessary to meet my needs now being in the distribution phase of investing. The benefit of this asset allocation is that it provides sufficient income, maximizes diversification, minimizes volatility, and provides long-term returns.
The 20% held in cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback. In addition, cash helps stabilize a portfolio during stock market volatility. Example of investments held in this area are cash, money market mutual funds and CD's.
The 40% held in the income area provides me ample income generation to meet my income needs in retirement. It is a well diversified area that incorporates a good number of income generating type funds. Some examples of investments held in this area are ISFAX, PONAX & PGBAX.
The 40% held in the equity area provides me some dividend income along with some growth, that equities generally provide, that offsets the effects of inflation over time. Some examples of investments held in this area are NEWFX, SVAAX, SPECX
Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way principal grows over time.
@Gary1952 ... Thanks again for your question. I'm thinking the above information will provide the answer(s) you seek (or might seek) about me (going forward) as to how I govern.
Old_Skeet