Municipal Bonds
Municpal bonds are another form of bonds that investors can choose. We will discuss the characteristics of munipal bonds.
- Investment objectives are strictly income
- Liquidity low to high
- There is a high to low fluctuation of pricipal and return
- Interest payments are exempt from federal taxes. You may be subject to the alternative minimum tax (AMT). Federal taxes apply to any capital gains
- You are a creditor of issuiong municipality and are subject to default risk
- Do not hold tax-exempt investments in retirement accounts.
Written by mike on September 24th, 2006 with no comments.
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