June 12, 2013

Intelligent Investor: What’s Eating Munis?

From WSJ.com

Intelligent Investor: What’s Eating Munis?
By Jason Zweig

Municipal bonds are beginning to look tempting — but investors who buy munis in haste can unwittingly hand over their first year’s worth of income to their broker.

Fortunately, with a few simple steps, you can control that risk and maximize your net return.

Intriguingly, the health of many municipalities is improving even as tax-free bonds offer relatively attractive returns. Yields on the highest-quality, widely traded munis, triple-A-rated, 10-year “general obligation” bonds, have risen by 0.45 percentage point since May 1, according to Daniel Berger, senior market strategist at Municipal Market Data.

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