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Capital Gains Tax: If you sell your bond before maturity at a profit, you may owe capital gains tax. If you’re in a high tax bracket, investing in tax-free municipal bonds can help reduce your ...
Municipal bonds, or "munis," are popular investments for a few reasons. Most notably, as a government bond, they can be the closest thing to a safe asset that the market offers. And, investors ...
With proposed legislation to raise income taxes and capital gains taxes circulating in Washington, D.C., municipal bonds have become an attractive option for investors seeking tax-free income and ...
A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
For market participants who own a bond, collect the coupon and hold it to maturity, market volatility is irrelevant; principal and interest are received according to a pre-determined schedule. But participants who buy and sell bonds before maturity are exposed to many risks, most importantly changes in interest rates.
If you’re thinking about buying municipal bonds, here are your options.
The bet in municipal bond arbitrage is that, over a longer period of time, two similar instruments--municipal bonds and interest rate swaps--will correlate with each other; they are both very high quality credits, have the same maturity and are denominated in U.S. dollars. Credit risk and duration risk are largely eliminated in this strategy.
Here's what you need to know about investing in municipal bonds. Skip to main content. 24/7 Help. For premium support please call: 800-290-4726 more ways to reach us ...