The best offense is a good defense.There's no question that the stock market's volatility has made investors very nervous these days. Whether you own blue chip stocks Blue chip stocks Common stock of well-known companies with a history of growth and dividend payments. or processing chip stocks you've probably had too many restless nights. When you're through analyzing the economic data and are pretty sure that you're on the right side of an investment, you flip on the T.V. only to find out you're now on the wrong side, and the roller coaster What a bad CD-R disc is often called. See CD-R and underrun. ride begins once again. The bond market affords you peace of mind by allowing you to accumulate wealth consistently. Whether you're earning tax-free income tax-free income The income received but not subject to income taxes. For example, interest from most municipal bonds is free of federal income taxes and often from state and local income taxes as well. Compare tax-deferred income, tax-sheltered income. or high yielding taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. , you can see dividends and interest hitting your account each and every month. And that is a good feeling! If you purchase a 10 year 4 1/2% tax-free municipal bond today, that's equivalent to a taxable return of approximately 8.20% given a combined maximum tax rate of about 45% between Federal and State taxes. You'd be very hard pressed to find a stock that could average an 8.20% return each and every year for the next 10 years! Sure, the bond market might seem a bit boring, but you'll appreciate the steady stream of income you'll earn for the next decade. David Bender David Bender is a political activist and host of the radio show "Politically Direct" on Air America Radio. Bender has been involved in politics since he was twelve, when he suspended his involvement in the 7th grade to volunteer for Robert Kennedy's presidential campaign. is Managing Partner/Private Client Group with Moors & Cabot, Inc. He has specialized in the bond market for 23 years and written articles on the subject for numerous publications. For more information, please contact Moors & Cabot directly at 1.888.986.6677 (toll free). |
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