Stability is a relative term in the municipal bond market. Municipal bonds tend to be safer than many other types of investments, but they are less safe than U. Treasury bonds. You can also trade in multiple kinds of municipal bonds, such as assessment bonds, revenue bonds, or general obligation bonds. The issuer of the bond also matters; bonds issued from municipal authorities in a city with strong financials would be considered more stable than those from a city whose credit rating has been downgraded or has recently filed for bankruptcy.
Plenty of investors make an understandable mistake during tough or uncertain times and develop tunnel vision about stability and safety. In their flight from risk, however, they fail to consider how an investment fits into their financial plans. Municipal bonds can be a tax haven, often generating higher returns than Treasuries.
They can still lose to inflation and tie up large sums of money for much longer than a recession typically lasts. Internal Revenue Service. Accessed July 30, Moody's Investors Service. Securities and Exchange Commission. Municipal Bonds. Corporate Bonds. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.
At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Stock Market Basics. How Stock Investing Works. Investing vs.
Managing a Portfolio. Something went wrong. Please try again later. Best Ofs. More from. By Kat Tretina Contributor. Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities.
Performance information may have changed since the time of publication. Past performance is not indicative of future results. Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available.
Miranda Marquit Contributor. Benjamin Curry Editor. The Forbes Advisor editorial team is independent and objective. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive compensation from the companies that advertise on the Forbes Advisor site.
This compensation comes from two main sources. First , we provide paid placements to advertisers to present their offers. This site does not include all companies or products available within the market. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor. While we work hard to provide accurate and up to date information that we think you will find relevant, Forbes Advisor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.
The MSRB also provides educational material on various topics related to municipal securities at its Education Center and EMMA websites that may be helpful to investors researching municipal bonds or seeking additional information. Search SEC. Securities and Exchange Commission. Investor Alerts and Bulletins. Overview of the Municipal Securities Market The municipal securities market plays an important role in our daily lives.
How is the Municipal Securities Market Regulated? What types of Disclosures are Available for Municipal Securities? The Offices of Investor Education and Advocacy and Municipal Securities have provided this information as a service to investors. In addition, municipal borrowers sometimes issue bonds on behalf of private entities such as non-profit colleges or hospitals.
In cases where the conduit borrower fails to make a payment, the issuer usually is not required to pay the bondholders.
Get access to:. Note that many issuers maintain websites or webpages specifically for investors in their municipal bonds. Some issuers hyperlink to those webpages from their homepage on EMMA. Learn how to find issuer homepages on EMMA. The MSRB is a self-regulatory organization whose mission is to protect investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. Use their Contact Form.
As with any investment, investing in municipal bonds entails risk. Investors in municipal bonds face a number of risks, specifically including:. Call risk. Call risk refers to the potential for an issuer to repay a bond before its maturity date, something that an issuer may do if interest rates decline -- much as a homeowner might refinance a mortgage loan to benefit from lower interest rates. Bond calls are less likely when interest rates are stable or moving higher.
0コメント