Last November I switched out of a money-market fund to a AAA Mountain States T&T bond. Where could I find the price this bond was selling for on Nov. 27, 1979, the day I purchased it? Also, I did not understand that the bond was sold "over the counter." I thought AAA bonds were stable; I would never have considered buying a bond that would likely decline 10 points in two months. I am 72 and have meager assets.Was a bond suitable for me? E. B.
Your broker probably considered your purchase of an AAA telephone bond as a conservative investment to lock up what was then a relatively high interest rate. He and many other professionals have watched in dismay as interest rates rose sharply and bond prices generally declined. Bonds, as detailed in a previous "Moneywise" column, vary inversely in price with long-term interst rates -- prices up as interest rates decline, and vice versa. thus, they are not stable in a volatile interest market. Most bonds are sold "over the counter", as there is a limited listed bond market. By the time you read this, however, you may find that the price for your bonds is approaching the price you paid and will likely exceed that price later. Only a sampling of bond prices are quoted daily in the Wall Street Journal. Your best bet for determining the price on Nov. 27, 1979, is to ask your broker for a specific quote from the bond dealer he bought your bonds from. In the meantime, you can rest easy with the knowledge that the AAA rating is the highest awarded, and the yield from your bond continues. You can probably look ahead another year or year and a half to selling the bond at a profit.