More From Munis

The yields on municipal bonds have not fallen as sharply as those on Treasuries during the subprime crisis. Now, most munis are paying out more tax-exempt interest than comparable Treasury bonds pay in taxable interest. After taxes, investors in the 28% tax bracket end up with 54% more from munis than from Treasuries. In the 35% tax bracket it's 70% more.

In the past, it was difficult for investors to buy individual munis because it was difficult to get pricing information. That's changing now because you can go to Web sites like Investinginbonds.com to find current prices and yields.

Be aware that if income taxes go up under the next Administration, munis will be in demand and prices likely will rise, to the profit of today's investors.

* * * * *