Fixed Income Forum

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Q: My husband and I have a fixed income of Social Security. We have approximately 100,000 in savings. We own our own home. What is the safest investment to grow our savings?

A: Hello Leslie, Municipal bonds have been called "the second safest investment" after U.S. Treasury bonds. The default rate for tax-exempt municipals, with $3.7 trillion of bonds outstanding, has a default rate (meaning you didn't get your money back) of less than one-half of a percent over 20 years. Those default rates are small, even after taking into account the 2013 bankruptcy of Detroit, and the current troubles of Puerto Rico's $70 billion of bonds in distress....

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Q: What is the average interest rate or principal used on Mutual Funds?

A: Kamal: First, just to make clear, I am talking about municipal bond funds, not stock mutual funds. There is no single average interest rate/yield for muni funds. The returns will vary depending on the maturity focus (short-term vs. long term), as well as the underlying credit risk of bonds that make up the portfolio....

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