No. of Recommendations: 0
Hello,

Emphatically, this is NOT a dumb question. As a generalization it is correct but the Tax Code has a variety of "gimmics" that make it tough to apply.

There is a concept that sales persons apply to municipal bonds and funds call "tax-equivalent yield". This attempts to equate after tax returns on taxible bonds to municipal yields. You can see it and the formula in any promo for municipal bonds or find it on a municipal bond site. It's interesting, perhaps even useful in some cases.

But like all promotions it ignores the basics of bonds which are two in number.

1. The return OF your money is first.
2. The retune ON your money is second.

Cheerio.
pl
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement