Your municipal bonds center
Municipal bonds are often an ideal investment choice if you are nearing or in retirement, or simply seeking tax advantages. Interest paid on tax-free municipal bonds is exempt from federal taxes and also state taxes (in most cases) if you live in the state that issued the bond. However, bonds may be subject to federal alternative minimum tax (AMT), and profits and losses on bonds may be subject to capital gains tax treatment. Raymond James is a top 10 underwriter nationally and offers bonds in municipalities all across America.
There are many factors to consider
The bond’s interest rate should not be your sole focus. Your due diligence should also include the security of the bond, the source of the revenue and the underlying ratings. We can help you find municipal bonds and other fixed income investments to fit your financial objectives and desire for a well-diversified portfolio designed to mitigate market volatility.
At Raymond James, we believe bonds can play an important role in a well-diversified portfolio. Bonds can provide predictable income and, most important, principal protection.
*Also bonds may help minimize overall volatility.
Who invests in bonds?
Bonds can benefit an investor’s portfolio in a variety of ways. For retirees, bonds may provide a predictable income stream and safety of capital. For other investors, bonds can help meet future wants or needs, such as vacations, college funding or the purchase of a house.
The market value of bonds is subject to market fluctuation and may be worth less than the original cost upon redemption (or maturity). Diversification does not ensure a profit or protect against a loss. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices generally rise.
Municipal bond interest is not subject to federal income tax but may be subject to AMT, state or local taxes. U.S. government bonds are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. International investing involves special risks including currency fluctuations, different financial accounting standards, and possible political and economic volatility.
High-yield bonds are not suitable for all investors. The risk of default may increase due to changes in the issuer’s credit quality. Price changes may occur due to changes in interest rates and the liquidity of the bond. When appropriate, these bonds should only comprise a modest portion of your portfolio.