Mutual Funds for the Utterly Confused

Municipal Bonds and the funds that invest in them are finding a rare opportunity among the economic downturn that is effecting our nation and the globe as I write this post. Chapter six, deals with this type of investment and as we have come to find out, what could be quite a lucrative one at that.

Now, between you and me, a municipal bond fund, for all of its tax advantages, especially if you live in a state where the fund provides you tax-exemptions, is only as good as the city, county or local government’s ability to repay the bondholders.

I open the chapter with a look at two scientists - yes, I refer to them often and use them throughout all of my writings - who are looking for what could be the exact moment the crust of the earth, the ground beneath our feet became solid. One of the easiest ways to do this is to find fossilized bacteria.

Ancient plate tectonics, as pictured above were found in Greenland at the Isua Supracrustal Belt, offering geophysicists a look back at some of the earliest solid ground, aged at 3.8 billion years ago. Identifying these “pillow lavas and associated dikes” and “the finding of ophiolites in the oldest known rock structures leads the scientists to believe that such rocks have formed throughout Earth’s nearly 4.5 billion year history”.

Municipal bonds and the funds that buy them are basically investors in the local infrastructure. Roads, schools and stadiums are all constructed with the use of public money that is paid back with interest. One thing to beware of though: if the bond issuer - your municipality cannot make the bond payment, your local taxes may rise to do the job, offsetting any gain you may have thought you received.