| If you're an investor that is leery about the state | | | | sell your bonds prior to maturity in the |
| of the economy and the mass of credit issues | | | | over-the-counter market. This is especially |
| facing companies then you probably are not sure | | | | advantages if the price of your bond has grown |
| where to safely put your hard earned money. | | | | substantially and you can make more out of |
| One conservative yet still liquid option is to invest | | | | selling it in the open market than you can make |
| in Municipal Bonds (Munis) which offer a high rate | | | | from keeping it through maturity. Besides looking |
| of interest and principal payments received from | | | | at tax exempt status another important issue to |
| the issuer. Munis are bonds issued by public | | | | look for from companies that offer Munis is to |
| entities below the state level in order to raise | | | | make sure they have a BBB rating or better. The |
| money to build and/or make improvements. | | | | higher the rating the more reassuring it will be |
| For the most part Munis are exempt from | | | | that the company will be able to pay you the |
| Federal Taxes and in many areas, local/state | | | | principal/interest that they promised. Also |
| taxes as well. This is where research comes in | | | | remember that the highest yields are not always |
| because there are a group of taxable Munis. | | | | the best. A good rule of thumb is the higher the |
| These often offer a higher rate of return but | | | | yield for Munis the more risk you take of the |
| with taxes taken you're usually better off taking | | | | company not being able to payoff the principle |
| a lower yield tax exempt bond. Good websites | | | | interest. |
| for researching Munis and their rates are and | | | | One more way to make your investment safe is |
| Munis are also liquid which means your money is | | | | to purchase Insured Municipal Bonds whereas the |
| not trapped and you can cash out of them at | | | | insurance company will pay you the principal and |
| any time. Make sure you pay attention to the | | | | interest owed in the rare cases where the Muni |
| yield of the bond because if you have to sell it | | | | company defaults. There is no absolute safe |
| prior to maturity you will get the current yield | | | | haven for investments. If you're looking for a |
| rate and NOT the maturity yield. The minimum | | | | very reliable investment with nice steady interest |
| investment for most Munis is five grand, so it's | | | | payments then I suggest looking into investing in |
| affordable to most investors that want to enjoy | | | | Municipal Bonds. From my experience they offer |
| the conservative approach while receiving | | | | one of the safest investment vehicles for |
| predictable and steady payments from their bond | | | | conservative and economy leery investors. It |
| investment. | | | | sure beats stuffing your money under the |
| One other great option of Munis is that you can | | | | mattress and letting it devalue over time. |