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I am in a fortunate position of having invested income (about $41K) from a trust becoming fully mine in August. The trust was previously maintained by my mother, who invested the money in tax-free municipal bonds over the past 13 years. These bonds are too safe for my portfolio, and I want to re-invest the money elsewhere after a full distribution.

Her bonds investor has encouraged me to "not sell" (of course) and also mentioned that if I do sell, then he can "get the best price, and he would like to buy them back, because no one can get these types of bonds anymore".

He has listed out the bonds in a spreadsheet for me, and I would like to know what my options are for selling them for the highest price. I understand that he would get a spread if he bought them back, but I would prefer to get the highest price for them. How and Where do I start the process of maximum distribution? Thanks

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Never trust a single source to give you a fair price, especially if they are not in competition, moreso if they know that's the case. I would want to get a quote from at least one other broker in terms of what they feel they can sell the bonds for. (and let them know they are not the only one you are getting a quote from)

To start with you need information, such as when is the last time a bond like the ones you have traded and what did it sell for. Also sources for where you can sell the bonds and more info on the entire subject.

SIFMA (The Securities Industry and Financial Markets Association) has a pretty helpful website called InvestingInBonds.com. I find it has a wealth of information, and is relatively free of bias. On the Municipal Markets at a Glance page you can get history for various bonds if you have the CUSIP (pronounced 'que-sip') numbers for the bonds.

If these bonds are as good as the advisor is telling you they are, then they should be selling for a premium, and the recent sales history would reflect that.

I'd find one or two other potential sellers, and get prices from each of them, compare that against recent history and go with whichever one seems to be offering you the best deal.

In terms of choosing someone, and how to go about selling bonds, the same website has some excellent information and guidance on buying and selling bonds and How to Choose an Investment Professional which includes how to check up on them to see if they have ever faced disciplinary action, etc..

I would also consider any gains you might have to declare if you sell these for more than face value, and if that would be taxable etc.

I would also question your 'too safe' judgement. Just because something is 'safe' I would not necessarily throw it out. You need to look at the return relative to the risk, and if you are not investing in a tax sheltered account, the affect of taxes on your net return. If these are earning a really good return, for fairly low risk, they might be worth keeping, especially if in today's market you need to take substantially more risk to get a comparable return. Taking more risk to get nearly the same return isn't very wise, since an aspect of the risk is perhaps not getting any return, or losing money. In a volatile market there can be a substantial benefit to having a lower risk 'foundation' that you build upon with more risky investments, in order to provide some risk diversity in your portfolio.

You might want to consider for example how these bonds have done over the last 13 years, compared to a similar investment in the type of 'less safe' vehicles you are considering. Perhaps you'd be better off just holding these to maturity instead of gambling on something with a lot more risk that could go south on you.

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