https://www.financial-planning.com/news/muni-bonds-sport-attractive-yields-for-retirees?feed=00000153-9f90-d098-a37b-dfb9d93c0000 Lee Conrad
Published
October 19 2018, 4:42pm EDT
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Muni bonds sport attractive yields for retirees
The municipal bond market remains steadfast despite investors' expectation that the demand for muni bonds would dwindle because of new lower tax rates, and bond prices would drop as a result of interest rate increases, according to this article from Kiplinger. Indeed, the economy and the muni market proved resilient and tax revenues have been strong, said one expert. For older investors, muni bonds can also offer diversification as they tend to have low correlation with other fixed-income investments. To be sure, tax reform has been a mixed bag for muni bonds, but a few other factors working in their favor now include the fact that there was a huge spike in issuance in late 2017, which constrained the supply of muni bonds this year, helping to support prices. Moreover, muni defaults, which have been historically rare, have lately dropped to their lowest level since 2008.
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