Experts expect the muni market to deliver solid performance throughout 2026, driven by several key factors:
: Spreading investments across different maturities to mitigate interest rate risk. why buy municipal bonds
: Bonds bought at a "market discount" may trigger capital gains taxes (de minimis tax), and some bonds may be subject to the Alternative Minimum Tax (AMT). Experts expect the muni market to deliver solid
: Although rare for high-grade munis, the financial health of the issuer determines the safety of your principal. 5. Recommended Investment Strategies for 2026 The primary reason to buy municipal bonds is
: If market interest rates rise, the price of existing bonds will fall.
For an investor in the top tax bracket (37% + 3.8% NIIT = 40.8% total federal rate), a is equivalent to a 6.1% taxable yield .
The primary reason to buy municipal bonds is their unique tax-exempt status, which significantly enhances their actual take-home return.