Thursday, April 23, 2009
Munis: Better Than Treasuries?
Tax-free bonds offer some nifty bargains.
There's a lot of fear at the moment that cities and states will default on their debts. The panic has left the municipal bond market in shambles. It's full of opportunities, too.
That's because, in some corners of the market, yields spreads have been turned on their heads. In a rare twist, some tax-free munis are offering the same or better yields as taxable Treasuries of the same maturity and, in some cases, with little or no greater risk.
If you're holding U.S. government bonds right now, you're painfully aware of the stingy yields. T-bills that mature in a year or less are paying 0.5% (annualized). The five- and 10-year Treasuries pay a mere 1.8% and 2.9%, respectively...
Forbes: Munis: Better Than Treasuries?
There's a lot of fear at the moment that cities and states will default on their debts. The panic has left the municipal bond market in shambles. It's full of opportunities, too.
That's because, in some corners of the market, yields spreads have been turned on their heads. In a rare twist, some tax-free munis are offering the same or better yields as taxable Treasuries of the same maturity and, in some cases, with little or no greater risk.
If you're holding U.S. government bonds right now, you're painfully aware of the stingy yields. T-bills that mature in a year or less are paying 0.5% (annualized). The five- and 10-year Treasuries pay a mere 1.8% and 2.9%, respectively...
Forbes: Munis: Better Than Treasuries?
Permalink posted by markw @ 4:45 AM 
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