Putting Together a Portfolio of Municipal Bond Investments

    by Annette Thau

    Putting Together A Portfolio Of Municipal Bond Investments Splash image

    This is the second article in a series of three dealing with municipal bonds. The first article (“What You Need to Know About Investing in Municipal Bonds,” October 2002 AAII Journal; available at AAII.com) discussed two topics: determining whether you would earn more by buying munis or by buying taxable bonds; and the meaning of credit quality ratings. The final article will discuss how to shop for munis: their pricing and markups, as well as sources of information on the Internet about prices and markups.

    This article addresses a variety of topics:

    • First, how to determine which maturities best fit your financial objectives;
    • Second, comparing premium bonds, discount bonds, and zero-coupon bonds; and
    • Third, some tax issues you should understand.

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    → Annette Thau