Municipal Bonds: The Turtle That Keeps On Winning! | Page 2 of 2 | ETF Trends

Furthermore, municipal bonds not only provide attractive income on a tax-free basis, but they also accomplish this objective with significantly less risk. An often-overlooked measure of income generation efficiency is risk-adjusted income. Relative to other income-producing asset classes, municipal bonds generate higher levels of income per unit of risk, particularly versus equities, which display pre-tax yields. This is illustrated in the chart below:

Market Yield and Risk Adjusted income

Despite the inherent benefits of municipal bonds, naysayers will continue to belittle the fixed income Tortoise and praise the equity Hare. For 2019, Sage is betting on the Tortoise.

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