Drop it into MDParticipantStatus: PhysicianPosts: 440Joined: 09/20/2018
I have a need to put either more cash or bonds into my brokerage account. I live in NYS and I am in the 24% federal tax bracket. Does anyone have any experience with the NY tax exempt fund. I am not too keen on its long duration. I also consider the Short term tax exempt. (Realizing this is only federal exemption.) But I think I would do better keeping it in cash with the Prime MM account. What am I missing?
Is it fair to compare the yield of a MMF with the SEC yield of a bond fund like VWSTX?
Sorry if this is basic. I am new to this and very new to bond funds. They seem more complicated then stock index funds.October 24, 2018 at 8:11 am MST #159627The White Coat InvestorKeymasterStatus: PhysicianPosts: 4601Joined: 05/13/2011
You could do half in the NY fund and half in the ST tax exempt to get some state benefit and shorten the overall duration.
Did you actually run the numbers to be sure a tax-free and not a taxable bond fund is right for you? It might not be in the 24% tax bracket.
The bond fund vs MMF fund question is a different question from the taxable vs tax exempt question. Decide them separately.
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Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011October 24, 2018 at 8:19 am MST #159634Drop it into MDParticipantStatus: PhysicianPosts: 440Joined: 09/20/2018
That is a good point. For the NY fund considering state taxes and since it is a high yield fund it would work in my favor at my bracket but the Short term tax exempt would not yield any more then a short term investment grade.
thanks for the help.October 24, 2018 at 8:58 am MST #159649PedsModeratorStatus: PhysicianPosts: 4671Joined: 01/08/2016
with a duration of 6.9 years, i wouldnt worry that much. VWIUX is 5.3 if it really bothers you and you would still come out ahead of total bond.
what % of your FI is this?
i dont pick state specific funds for the majority of my holdings, i would max out at like 50% and trade the cost for diversification.October 24, 2018 at 2:43 pm MST #159771