I am one who does not believe in the 50-50 split and have never owned an outside state or national municipal fund. This merely defeats half of my purpose. CA is the drama queen of states when it comes to financial or fiscal “crises” as they are seasonal like our natural disasters. Even with three cities that went bankrupt, and the occasional IOU or payment warrants issued by the state, I have never been delayed or shorted a dime on the income or realized a loss of a cent on principal.Yes, I am aware of the CA options. After reading many posts on this forum, it appears one should not hold more than 50% in a state muni for risk purposes. This is why I wanted to see how a national muni would compare.
Municipals are not just state only issues. They could contain five levels:
•State issues
•County issues
•City issues
•Private activity issues (if applicable)
•Qualified territorial issues (if applicable)
It boils down to a personal comfort level. I chose to have all municipals be Vanguard CA issued funds as my other holdings are mostly tax preferred/deferred so it does not matter to me as I have diversification. I do have some non-municipal holdings in taxable through the Vanguard STAR fund, but plenty of space to accommodate the ordinary income.
Disclaimer: I own all three Vanguard CA tax-exempt offerings. Vanguard CA tax-exempt MM VCTXX and CA Intermediate VCADX funds since 1996 and bought the CA Long-term VCLAX in 2018 before being retired.
Statistics: Posted by Hacksawdave — Mon Aug 19, 2024 5:31 pm — Replies 6 — Views 354