Mississippi Bonds (Mississippi Municipal Bonds)

By: EconomyWatch Content   Date: 5 November 2009

About The Author

EconomyWatch Content

Follow The Money

EconomyWatch, Content Team

 

  • Dot Div
  •      

Mississippi Municipal bonds, or Munis for short, are bonds issued by the city, county or state governments for a variety of projects, such as building schools, expanding highways or constructing a new public park in the state of Mississippi. Municipal bonds are normally exempt from state and local taxes, making them an attractive investment to investors in the middle to higher tax brackets.

Mississippi Bonds (Mississippi Municipal Bonds): Some Tips

The promise of tax free income, combined with a safety net, makes municipal bonds an attractive option for young and mature investors alike. Yet, investing in municipal bonds comes with some risks and proper assessment is required before an investment. Knowing when to use municipal bonds in a portfolio and the type of bond will help maximize the overall growth of one's net worth.

Municipal bonds are best suited for someone who wants diversification of his/her bonds and has a sizeable proportion of assets outside IRAs and 401Ks. This situation is ideal because the interest earned on municipal bonds is generally tax-free on a federal, and possibly state, level.

In addition, it is also necessary to compute and compare the yield on municipal bonds with other government and corporate bonds. However, with the exception of Alternative Minimum Tax (AMT) municipal bonds, munis should never be purchased in a tax sheltered account. Since the account already avoids taxation, an investor should take as high a yield on a taxable bond as their risk profile can tolerate.

Mississippi Bonds (Mississippi Municipal Bonds): How to Invest

There is a range of municipal bonds one can choose from, each with its own unique features and planning considerations.

General Obligation bonds: These bonds are backed by the issuer’s ability to file for taxes. General Obligation (GO) bonds are issued for public service projects. GO bonds are comparatively a safe bet as compared to revenue bonds.

Revenue bonds: Revenue munis, on the other hand, are issued by special state or local-government sanctioned entities. The interest is paid by the revenue generated to service that obligation.

Investors rely heavily on credit ratings by companies such as Standard and Poor’s, Moody’s Investors and Fitch. To ensure the safety of their investments, investors should find out:

·        The agency responsible for servicing the interest payments on the bonds

·        The intricate economic structure of the bond issuer

Mississippi Bonds (Mississippi Municipal Bonds): Some Recent Trades

·        Jackson County Mississippi Port Facility: Chevron USA corporate project

·        Mississippi Hospital Equipment and Facilities: Refunding Forrest County General Hospital


  • Dot Div
  •      

Most Popular in Municipal

Related Links
blog comments powered by Disqus