Thumbs Down: Fudged Bond Prices

Physician's Money Digest, October31 2004, Volume 11, Issue 20




Unlike stock prices, which are listedminute by minute on a variety offinancial Web sites, municipal bondprices aren't posted until the followingday. That leaves lots of wiggleroom for brokers who want to buylow and sell high. Although the differencebetween what a broker paysfor a bond and what they sell it for (ie,the markup) typically runs between1% and 2%, some trades carrymarkups of 10% or more. The higherthe markup, the higher the price andthe lower your yield becomes. Checking yesterday's prices with theBond Market Association ( can give you an ideaof what a bond is selling for. Help is on the way. Starting inJanuary 2005, current municipal bondprices will be posted on the Internetwithin 15 minutes after the trade.