Municipal Bond Forum
A Long-Term Investment
Q
What if we invest in California municipal bonds and find that we have to withdraw some or all the funds? Is there a penalty?
A
James A. Klotz responds:
Although municipal bonds are a liquid investment and can be sold at any time, the price you receive will be based on market conditions at that time. In other words, your bonds may be worth more than you paid for them, or less than you paid for them.
If you think you will have a need for your funds in the near future, bonds are not for you.You probably want to consider short-term CDs (taxable) or a tax-free money market.
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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.