Municipal Bond Forum
Where you live affects what you buy
Q
I am considering investing up to $6 million in tax-free municipal bonds. I currently live in Michigan. My concern is that the government, both federal and state, will not stop spending and therefore will continue to increase taxes. I am interested in short-term municipal bonds (I am concerned about a future increase in interest rates and want to preserve principal) that are exempt from federal, state, local and alternative minimum taxes. I am also considering moving to Florida. Can you help?
A
James A. Klotz responds:
We have helped individual investors achieve their investment objectives for almost 30 years, and we would be pleased to assist you in this regard.
The approach to building your bond portfolio would be considerably different as a Florida resident than if you remained in Michigan. Currently, a Michigan investor, because of state income taxes, is compelled to purchase bonds issued within the state or U.S. territories. A Florida resident, however, has no such geographical restrictions.
We would recommend speaking with one of our bond specialists to discuss your various options in greater detail.
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The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.