Suzie Orman said you can buy muni bonds with 4-5% yield ?! (bond, IRAs)

[Scott456]

Last night, Suzie Orman on her show interviewed a woman who just won 3.1 lottery, and she advised her to buy some mix of muni bonds to yield 4-5% annual returns. Is she exaggerating? I searched Google, the best I can find is Illinois bond 2017 with 3.124% yield. Any suggestions?
Thanks.

[BestintheWest]

Pick a state a view yields and ratings


Home : Municipal bond recent trades, bond rates, tax-free bonds for sale and news : MunicipalBonds.com

[mathjak107]

All you have to do to get that yield is hold them for 25-30 years. the risk there of getting left in the dust inflation wise over the next 30 years rules them out as any investment i would want to be in .

your going to get next to nothing today on good quality short term muni's . you have to go out very very very long term.

[chet everett]

Secondary market for munis is generally quite strong. Reality is that few municipalities get into real trouble, and those that do often are able to "work things out" with the assistance of their State. Many munis also are covered some form of insurance -- the amounts of the initial issue are often fairly small. After all these things often fund firetrucks or water plants, not like we are talking the national debt of Greece..

[Boompa]

The problem with listening to her advice is that too many people do it. When thousands of people do the same thing it becomes the thing to NOT do

[mathjak107]

buying these at all time lows and having to wait 30 years if rates rise is just nutty to do for 4%.

[Ariadne22]

I didn't see last night's show, but I'm guessing Suze was pushing these because there is no federal tax on the interest, which could improve the effective yield, although it seems 5% is not possible at today's prices even considering tax impact.

Suze is big on Roth IRAs and munis because withdrawals/earnings are tax-exempt federally. She says all she owns are munis.

[evilnewbie]

If I was super rich, I would do munis right now too... stocks are too volatile right now... isn't that sad?

[Oildog]

Agree thats a long time to wait for only 4%.

[mathjak107]

part of the obama plan is to make municipal bond interest taxable to those with higher incomes. that can be a killer to to that market as most of that market is bought by those with higher incomes.