If you’re looking for action outside the stock market, you might want to look at muni bonds.
Short for municipal bonds, these financial products are essentially loans – by investing you’re giving money to some government and in exchange they’re giving you return.
Although muni’s may not be as sexy as stocks according to Ben Thompson of Samson Capital they’re quite attractive in their own right. Here’s why:
-Less Volatile Than Stocks
-Overall, High Credit Quality
-The Only Tax Exempt Investment
But that’s not to say they’re entirely without risk. They do carry some risk, albeit less than most stocks.
General Obligation Muni Bonds
LOW VOLATILITY -- MEDIUM VOLATILITY -- HIGH VOLATILITY
Texas New York City California
How can you play it?
Fortunately, if you're an individual investor you don't have to go through the credit ratings of each and every state. You can get diversified exposure through ETFs as well as mutual funds.
Following are just a few ideas:
SPDR Barclays Muni Fund (TFI)
iShares National Muni Bond Fund (MUB)
Vanguard Short Term (VWSTX)
Vanguard Long Term (VWLTX)