Why Buy Municipal Bonds [ TESTED – 2026 ]
: Spreading investments across different maturities to mitigate interest rate risk.
As of early 2026, some 20-year AA-rated munis offer TEYs of nearly , outperforming comparable AA corporate bonds by approximately 171 basis points. 2. Market Outlook for 2026 why buy municipal bonds
: Although rare for high-grade munis, the financial health of the issuer determines the safety of your principal. 5. Recommended Investment Strategies for 2026 Market Outlook for 2026 : Although rare for
While generally considered safe, municipal bonds are not without risks that investors must monitor: why buy municipal bonds
: Analysts see specific value in pre-pay energy bonds and Low-Income Housing Tax Credit (LIHTC) bonds , which can offer yields 200–250 basis points higher than generic high-grade munis with similar default risks. 3. Municipal vs. Corporate Bonds Municipal Bonds Corporate Bonds Tax Treatment Generally tax-free (Federal/State) Fully taxable Credit Risk Historically lower default rates Higher risk of default Yield (Absolute) Typically lower Typically higher Yield (After-Tax) Often higher for top tax brackets Often lower for top tax brackets Volatility Lower volatility Higher volatility 4. Risk Considerations