•Vinyl •Metal •Designs •Boats
•Wood •Magnetics •Trailers •Cars Should you add ‘munis’
Full Service Sign Shop SPECIAL
ANYTIME - ANYPLACE
2 For $69.00
The Best Prices Around
to your portfolio?
175 Weaverville Hwy. Asheville, NC 28804
It’s election season. Although you pays 4% interest, and you’re in the uid markets, so if you buy a muni
won’t be selecting either a new presi- 28% tax bracket. To determine the from one of these issuers, you may
dent or a new Congress, you may bond’s tax-equivalent yield, subtract need to hold it until it matures. Also,
well have the opportunity to vote on your tax rate (.28) from 1, giving munis are traded “over the counter”
something that can affect your city you .72. Then divide the bond’s rate, rather than on an exchange, so it can
or state: municipal bonds. However, or .4, by .72, giving you 5.5%. This sometimes be difficult to get a price
North Buncombe HS
just because you vote to give your means you would need to find a tax- quote for your bond, not to men-
January 10 - February 14
state or local government permission able bond that pays at least 5.5% to tion a buyer. These liquidity issues
to issue municipal bonds doesn’t equal the yield of a tax-free muni may not matter to you, however, if
mean you have to invest in them. paying 4%. you intend to hold your bond until
But should you? Even if you’ve determined that a maturity, collecting regular interest
Before you can answer that ques- tax-free muni’s yield compares favor- payments along the way and eventu-
tion, you need to know what munic- ably to that of a taxable bond, you ally receiving your principal back.
ipal bonds are and how they work. need to assess some of the poten- There is also credit risk when invest-
General obligation bonds are backed tial risks of owning munis. For one ing in bonds, where if the issuer de-
by property taxes and finance proj- thing, municipalities are clearly not faults you could potentially lose all
ects from cities, counties, school dis- exempt from the effects of the long of your principal.
tricts and states. Revenue bonds are and harsh recession we’ve experi- In any case, as long as you’ve done
backed by a specific revenue source enced. Consequently, some projects your research and gotten help from a
natural foods • remedies and finance hospitals, utilities, air- funded by munis may have trouble qualified financial professional, you
supplements • toys • supplies • gifts
ports, affordable housing and other generating the revenue needed to re- may find that municipal bonds can
public works. So when you invest in pay the bonds’ investors. benefit you — so give them some
a revenue bond, you are being some- Another potential issue to con- thought.
Over 20 Lines of Natural & Organic Foods for Dogs,
Cats, Small Animals, Birds & Fish
what civic-minded, although you sider with munis is their liquidity.
aren’t confined to bonds issued by Some states, such as New York and This article was written by Ed-
Castor & Pollux • Wellness • California Natural
your city or state. California, issue a great many bonds, ward Jones for use by Bill Bough-
Solid Gold & more!
You can get other tangible ben- which are traded regularly. But some ton, Weaverville’s local Edward
efits from investing in municipal municipalities operate in more illiq- Jones Financial Advisor.
bonds, or “munis.” First, you’ll re-
ceive regular interest payments. Just
as importantly, these payments typi-
Southwest Corner - 25/70 & Monticello
cally are exempt from federal income
16th annual Christmas Craft Bazaar
Open Tues. - Fri. 11-7, Sat. 10-5
taxes — and possibly state and local
income taxes as well. Keep in mind,
The 16th annual Christmas Craft Bazaar at the Weaverville United
however, that they may be subject to
Methodist Church Fellowship Hall will be held from noon to 7 pm
the alternative minimum tax. Con-
on Nov. 13 and 9 am to 3 pm on Nov. 14. There will be more than 26
sequently, if you’re in an upper tax
crafters with unique, one of-a-kind items. Santa will be there to have
bracket, you may be especially inter-
his picture taken with the children. Refreshments will be available.
KEEP A LEVEL HEAD
ested in munis.
The Missions Committee of Weaverville United Methodist Church
Still, before investing in a muni,
sponsors the event. For information, call 645-2367.
IN AN UP-AND-DOWN MARKET
you’ll want to determine its yield.
Basically, a bond’s yield is the rate
of return it promises at any given
Amid recent market volatility, we’ve seen substantial
price; when a bond’s price rises, its
upswings and downturns. But when the market reacts one
yield usually falls, and vice versa.
The longer the time to a bond’s ma-
REECE’S TIRE DEALS
way, it doesn’t mean you should, too. The actions you take
turity, the greater its interest rate
today can significantly impact your financial future.
risk. To compare the yield of a tax-
(Old Kelly Building)
So before you alter your investment strategy, schedule a free muni to that of a taxable bond,
283 Weaverville Hwy.
financial review. We can help you stay focused despite the
you must calculate its tax-equivalent
Over 30 years experience!
market’s recent disappointments and find opportunities
yield, which is based on the muni’s
Fastest service in town!
for the long term.
interest rate and your individual tax
bracket. For example, let’s say you
Call today to schedule your financial review.
are considering a tax-free muni that
61 Weaver Boulevard
Same friendly faces & quick
service that you’re used to,
10% off w/
just at a new location.
Clothing, Gifts and More
New & Used Tires
133 Weaverville Hwy., Ste 2
Lawn & Garden Tires Danny Whitted
Custom Wheels owner since 1998
Mon-Fri.-8-5:30 – Sat 8-12 • Closed Sunday
828-645-6666 or 252-2254
14 THE TRIBUNE - November 5 - November 11, 2009 www.weavervilletribune.com
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