Michael Foster, the ‘CEF Professor’ from Contrarian Outlook, joins us for another episode to explain how to use municipal bonds to scale your tax-free income.
During this episode, you'll find out how to buy municipal bonds, determine if you should buy an individual muni bond, and understand the risk levels of the entire process. You'll learn how a municipal CEF operates, what tools to use, and how interest rates impact closed end funds. Listen to the end to hear Michael's top three muni funds and what Sam and Johnny Invest into themselves.
Where are we:
Sam/Michael - Bangkok
Johnny - Ukraine
Link to the newsletter: CEF Insider
2 Recent Articles on Municipal Bonds:
The Shockingly Common Mistake That’s Costing You Thousands
These 6%+ Yielders Are a Screaming Bargain
The muni funds recommendations discussed:
Neuberger Berman New York Intermediate Municipal Fund (NBO)
Nuveen New Jersey Quality Municipal Income Fund (NXJ)
Pioneer Municipal High Income Trust (MHI)
Start Here – Recommended Reading
06:09 - Are muni bonds boring?
07:27 - Why others invest in muni bonds?
09:01 - Tax considerations
10:02 - Three ways to buy municipal bonds
10:40 - Should you buy an individual muni bond?
13:00 - How does a municipal CEF operate?
15:25 - Average cap size
17:10 - Close end funds and rising interest rates
23:03 - Market trends and sell off
25:15 - Tools, software, and historical returns
26:59 - What is the risk level?
27:06 - Default rates
29:29 - California, New Jersey, Illinois
34:46 - Should you worry about fees?
38:55 - Recommended muni funds
48:42 - Investing in muni bonds
57:36 - Wealthfront investments
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