Continuing our bond discussion, there is news today that the Securities and Exchange Commission (SEC) is concerned about municipal bond investors getting a "fair price" and urged Congress to give the agency the power to improve disclosure standards and require audited financial statements for the $3.7 trillion municipal securities market as part of an effort to help retail investors in the market.
Municipal bonds are bonds issued by government municipalities or their agencies. Examples include cities, states, and public utilities. The debt obligations are used to raise money to fund the building of schools, parks, highways, and other projects for public use.
As explained in a MarketWatch article, SEC calls for more Muni-bond disclosure, an SEC report to Congress said:
....new disclosures would help retail investors, adding that 75% of the municipal securities market is held by retail investors either directly or indirectly through mutual, money-market, closed-end or Exchange-Traded Funds.
...The report notes that investors have "very limited" access to information about which market participants would be interested in buying or selling a municipal security, and at what prices.
We've recently discussed why some mutual fund investors may want to consider shifting from bond funds to bonds and this SEC report is wise to consider while you remember my caution to do your own research for buying bonds. A primary piece of this caution is to look at pricing information (among several other areas of bond investing) on free websites, such as investinginbonds.com or the Yahoo Finance bond investor page.
Stay tuned for more help on buying bonds and how you can build a portfolio with mutual funds...