While there have been few defaults in the municipal market, it’s important to note that not all muni bonds are created equal. The market offers many different types of bonds backed by varying legal pledges and revenue sources to repay the debt. The following are some of the qualifications it takes for a muni offering to meet our strict parameters to be considered for purchase.

Topics: fixed income, bonds, muni bonds, municpal bonds

A: Essentially, there is little difference between the two markets. Their structure is identical in terms of credit quality, revenue source, price and yield. The new issue realm is the initial offering of a security, similar to an initial public offering in the equity market. However, the volatility that is sometimes associated with an equity IPO does not exist in the high-grade new issue municipal market. The new issue market is simply the means by which a municipality raises cash by issuing debt. The only material discrepancy between the two markets is that newly issued municipal bonds typically have an extended settlement date of 1-2 weeks, as opposed to T+3 (investing shorthand for trade date plus three days).

Topics: bonds, muni bonds, municpal bonds, new issue muni bond, secondary muni bond

Q: Are you aware of the hidden costs in municipal bonds?

Topics: variable interest entity, municipal bonds, muni bonds, general obligation bond, revenue bond, registered investment advisor, markups on bonds

Municipal bonds are debt instruments issued by municipalities in any of the 50 states by the following entities: 1) territories, subdivisions, counties, cities, towns and villages of the state, 2) school districts, 3) agencies such as authorities and special districts created by a state and 4) certain federally sponsored agencies, such as local housing authorities. Historically, the interest paid on these bonds has been exempt from federal income taxes and is generally exempt from state and local taxes in the state of issuance.

Topics: municipal bonds, muni bonds, general obligation bond, revenue bond

Q: What are callable bonds? And what are the risk and return of callable bonds?

Topics: fixed income, bonds, municipal bonds, muni bonds, investing in bonds, investment strategy

Q: Can you capture higher returns on a municipal portfolio by lowering its credit quality?

Topics: fixed income, municipal bonds, muni bonds, investing in bonds, investment strategy

Q: How can you effectively harvest tax losses in bonds? 

Topics: fixed income, municipal bonds, muni bonds, tax swap, investing in bonds, dwm, dopkins wealth management

Municipal (or muni) bonds can be attractive to investors because the interest income is exempt from federal income tax, and in many cases, state and local taxes as well. Additionally, they often represent investments in state and local government projects that have an impact on our daily lives, including schools, highways, hospitals, housing, sewer systems and other important public projects.But what are the risks?

Topics: fixed income, municipal bonds, muni bonds