Municipal Bond Forum
On “For Income Investors, It’s All Bull”cont’d #2
Q
You wrote: “Today, investors can still buy investment-grade tax-free bonds yielding 4.50% to 5.00%. These returns are comparable to 6.92% and 7.69% on a taxable investment for an investor in the highest tax bracket, and 6.25% and 6.94% respectively in the 28% tax bracket.” What short-term bond is paying 5% tax free?
A
James A. Klotz responds:
We don’t know of short-term bonds paying 5.00% tax-free. We have always recommended buying longer-term bonds to maximize income, as indicated in my commentary.
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