Important Municipal Bonds Q&A From MBPA

September 15th, 2017

1. Why should I have my municipal bonds evaluated?

A. Municipal bonds have GENERALLY been a safe investment but the economy is in constant flux. We are sure you check your other investments as well your bank account. Bonds are no different.

2. How does the yield on municipal bonds compare with other fixed income investments?

A. Generally, since 2008, “A” rated municipal bonds have had a higher yield than the corresponding yield on the same maturity of U.S. Treasury obligations AND THEY’RE TAX FREE.

3. Why not just buy a municipal bond mutual fund or ETF?

A. Mutual funds and exchange traded funds (“ETFs”) are the most common methods for individuals investing in municipal bonds, but these come at a considerable risk. Mutual funds can be subject to forced sales – even at unfavorable prices – when too many owners all wish to sell their shares at the same time. ETFs are at risk when their stock price does not accurately reflect the actual price of the municipal bonds it holds, reducing value in the shareholder’s investment.

4. Why not just buy equities since the market goes up each day?

A. Historically approximately every decade the equity market suffers a correction where stocks decline. Sometimes it’s a modest correction and once in a while it can be a major correction, such as 2008. In addition, all investment portfolios should have diversification of asset classes and risk related thereto.

5. If I wish to expand or modify my municipal portfolio who can I trust?

A. The professionals at Municipal Bond Portfolio Analysis have been in the business for many years. We have experienced almost all investment cycles and we have been exposed to the various municipal financing techniques. We will evaluate your investment objectives and make recommendations based on those objectives. But the safety of your investment is always our first priority.

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