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Balance in municipal bonds

Q

Is it wise to put all your money in municipal bonds? It’s tempting because they’re tax-free. The money markets are paying around 1% and are taxable. Should one have some balance in their investment program?

E.A., Florida

A

James A. Klotz responds:

Your investment portfolio should only contain securities with which you are comfortable.

Holding municipal bonds exclusively does not necessarily connote “all your eggs in one basket,” as the $3.8 trillion municipal bond market allows for ample diversification.

Naturally, we cannot make recommendations without more information regarding your specific financial situation and objectives. Please contact us if you would like to speak with one of our bond specialists who will help you explore your options.

Jul 17, 2020

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