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Thomas Kenny

The Case for Munis in 2013

By December 28, 2012

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Municipal bonds have come under selling pressure so far in December due to growing concerns that the government will start taxing muni interest in some form in order to help close the budget deficit. At their new, lower prices, are municipal bonds a buy? CBS MarketWatch took a look at the outlook for munis in 2013 (see the full article here, and came to several conclusions:

  • Investors need to look beyond the headlines, since municipal bonds still offer attractive yields versus U.S. Treasuries.

  • Even though certain municipal defaults made headlines in 2012, most state and local governments remain in good health.

  • Investors are always better off making decisions based on their own goals and objectives, rather than the latest news.

In the near-term, investors should expect continued volatility due to the endlessly shifting news out of Washington regarding tax policy. Longer-term, however, municipal bonds can continue to serve their primary role as a source of tax-free income and possible portfolio diversification.

Learn more about the 2013 outlook for municipal bonds.

Comments
December 29, 2012 at 10:09 am
(1) Lacy says:

One of my biggest questions is, Y is it all of us people struggling and working and barely making it that are getting added taxes and we cant get any help from the government, yet ALL these people on welfare are living like nothing! Y not cut welfare benefits that we are already paying for and they r getting hundreds of dollars in foodstamps, housing paid for, all this crap and as for myself, my husband and I both work full time, barely survive, barely pay all the bills and get groceries and i have 2 kids and get NO child support and cant get any help at all and we r going to have to pay more in. taxes and be even tighter at home yet still have to work to barely survive!!!! All thi

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