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When to Invest in Tax Free Municipal Bonds?

General Guidelines

For most investors, the time to invest in any fixed income investment is when you have investment dollars available. And that holds true whether it is tax-free or taxable municipal bonds, corporate or government bonds or bank issued CDs.

If your investment objectives require that you maintain the market value of your investments to meet a short term need, then a money market fund or other short term account is appropriate.

If, on the other hand, your priority is income and you are using your investment dollars to maximize that income-why wait?  Some investors are always looking for more or better, no matter what investment they are considering. An investor new to fixed income investing may believe that rates will go up at some time in the future.

We can’t predict the interest rate market and we do not believe that you can either. What we can predict is that over time rates will go up in the market and they will go down.  In our experience, the strategy that has worked for many successful municipal bond investors is not to try to out guess the market. Rather, staying invested is typically more important and a more successful investment strategy than timing investment decisions.