Tuesday, Jan. 18
Everything Money – A Look Ahead
Sheryl's Tip of the Day: If you're in a high tax bracket, municipal bonds are a usually a good investment. They are federally tax exempt, and if you buy the bonds from the state you reside in, they are state tax exempt. This year with municipalities particularly strapped for cash, investors need to be more cautious. For example the "spread" between the prices of municipal bonds and US treasuries right now is quite narrow. A 10 year municipal bond yields about 3.41% vs. 3.3% for a 10 year US Treasury. The market is saying that investors may be better off in US Treasuries. Savvy investors need to diversify their municipal holdings, even if it means giving up the state tax advantages of owning only Massachusetts bonds. A medium term, national, diversified muni bond fund is currently the best way to go.
Learn more about municipal bonds at MuniNetGuide.com