You may know the basics of municipal bonds. You’ve talked to your broker about tax advantages when it comes to buying municipal bonds. However, you want to have access to that information yourself.

You can find this information on the Internet. However, you are concerned about making the most of municipal bonds, such as particular tax advantages or getting a particular municipal bond listing. There’s no need to feel overwhelmed. Here are three important areas to seek out if you plan on making the most of municipal bonds:

1. Get the latest on tax advantages on municipal bonds.

2. Discover muni bonds online.

3. Learn about the S&P municipal bond index.

Action Steps
The best contacts and resources to help you get it done

Learn about the tax advantages of municipal bonds

As you're aware, municipal bonds play essential roles for financing public sector projects, such as building sewer systems, hospital, parks, and other projects. However, you need more in-depth information, such as why investors are attracted to municipal bonds. Tax advantages are the major reasons.

I recommend: SIFMA is a valuable website you can refer to when learning about municipal bonds. Here, you can assess the tax advantages of municipal bonds. Edward Jones is another great website you’ll want to visit to learn about the tax advantages.

Search for muni bonds online

You don't need to look in the newspaper to look for the municipal bond listing. You can quickly find this information on the Internet. For example, if you're looking for California municipal bonds, you can get information such as Moody and S&P ratings, coupons, maturity dates and prices. You can also obtain additional information on muni bonds, including financial statements. Municipal governments must file this information in order to issue municipal bonds.

I recommend: FMSbonds is a great website to look at if you want to buy municipal bonds. This business provides you a comprehensive municipal bond search. Here, you can get the state the municipal bond is in, along with the price, Moody and S&P ratings and maturity dates. LexisNexis is also another website you’ll want to visit to get a municipal bonds listing. In addition, you can learn about municipality filings.

Study the S&P municipal bond index before you buy municipal bonds

Using the S&P municipal bond index is another great way of getting information for municipal bonds for sale. This index contains more than 7,000 bonds, which has a total market value of more than $470 billion. Although it is a national index, the S&P municipal bond index consists of sub-indices, such as the S&P New York Municipal Bond Index and S&P California Municipal Bond Index. You can get additional information, such as the municipal bond's weighting and taxability.

I recommend: You can learn about the S&P municipal bond index by visiting the website at Standard and Poor's. Bond Buyer Online is another website you’ll want to visit; it shows the list of municipal bonds that make up this index.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider investing in a municipal bond fund if you want to invest in more than one bond. You'll have a broader exposure to bonds without having spend a lot of money.

Municipal bonds (or munis) are an investor's dream because the income earned from the interest paid is exempt from federal (and sometimes state) income taxes. But more than just another financial instrument, municipal bonds help city and county governments pay for much-needed improvement projects for real-world infrastructure like roads and bridges, sewer maintenance, even new schools.

Before deciding to buy municipal bonds, perform a municipal bond search on the Internet to:

1. Make sure you know what, if any, municipal bond tax applies to the interest earned and any transaction costs involved when you buy municipal bonds.

2. Learn about the issuer and the issue the bond is being used to fund.

3. Check recent transaction prices to make sure you're getting a good price for the bond.

4. Find out whether or not the muni bond is insured.

Action Steps
The best contacts and resources to help you get it done

Do your research on muni bonds

More than 50,000 state and local entities issue bonds for over 2 million bond issues. Daily trading is estimated at $11 billion. Overall, more than $1.5 trillion worth of municipal bonds are in the hands of investors. Some are traded while others are held until they mature. There's a lot to know before investing.

I recommend: Read the entry on muni bonds at InvestinginBonds.com, a website run by the Securities Industry and Financial Markets Association. It provides a basic background to the considerations involved in buying muni bonds online. BondsOnline, run by Twenty-First Century Municipals Inc., is an online information-services company that features news about the fixed income market, as well as price quotes and research reports.

Consider a municipal bond fund

Whether or not to buy bonds individually or invest in a municipal bond fund is a matter of debate among financial planners. Individual bonds can provide an investor with freedom and autonomy in controlling his or her own portfolio. Funds, on the other hand, can provide investors with diversity, liquidity and lower trading costs, all in addition to a professional manager who can decide when it's okay to buy slightly lower-grade bonds to get higher yields.

I recommend: Investigate some of the fund management firms like Fidelity or Wells Fargo. They offer a broad variety of funds that could assist you in your municipal bond search.

Protect your municipal bond portfolios

Municipal bond insurance guarantees that you, the holder, receive your interest payment if the bond issuer defaults. Coverage is generally good for the life of the bond and can't be cancelled by the insurer. Only municipal bonds with credit ratings of BBB or higher are typically insured. Policies can also be taken out on municipal bond funds.

I recommend: Read up at WM Financial Strategies about the process by which bond insurance is issued to make sure you know the details. But consider carefully whether insurance is really necessary. Recent developments in rating agency methods, as discussed at Seeking Alpha, are trending toward rating municipal bonds with the same method used to assess corporate bonds. If this continues, there's a good chance more municipal bond issuances will win AAA scores, which would essentially cancel out the need for insurance.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Make sure any municipal bond you buy is issued by a municipality with: 1) a population of 10,000 or more; 2) a diverse economy; and 3) a history of punctual payment on past obligations.

You need to quickly understand how municipal bonds work. You’ve just started working for a bond firm that specializes in trading municipal bonds and bond funds. Your manager wants you to get municipal bonds education and training. Attending school is an option, but you don’t want to spend money and time getting an advanced degree. Instead, you just want to get up to speed, understanding the terms and the relationship between yields and prices.

You do have options. There are many websites that have valuable information on municipal bonds. Who knows? After you’ve become familiar with muni bonds, you may decide you want to become a licensed bond broker. When it comes to municipal bonds education and training, you can do the following:

1. Learn about muni bonds through online courses.

2. Become skilled on how to buy muni bonds online.

3. Obtain training in managing bond portfolios by studying for a Series 7 exam.

Action Steps
The best contacts and resources to help you get it done

Use the Internet to learn all about muni bonds

Most people know that government entities, such as counties, cities and states, issue bonds so they can finance and perform their projects. However, you'll want to know other information, pertaining to municipal bonds. You'll want to know how experts rate muni bonds. You'll also want to know the bonds' yield and rating or if they're tax-free or taxable.

I recommend: New York Institute of Finance offers a comprehensive course on muni bonds. Here, not only will you learn about the different types of municipal bonds, but you'll understand their tax advantages as well as trading strategies. Action Forex is another place you can learn about muni bonds. This website compares municipal bonds with corporate bonds. It also discusses the security of the bond, explaining the difference between general obligation and revenue bonds.

Learn how to buy muni bonds online

You don't need to use a broker to buy municipal bonds. Instead you can go to a website that specializes in them, open an account and start trading. These websites offer these bonds at wholesale price. As a result, this will help you save on commissions. You'll want to consider one of these websites because you'll have access to a large municipal bonds listing. You can find vital information on them, such as quotes and yields.

I recommend: Zions Direct offers education on investing. You can access more than 25,000 bonds. FMSbonds also provides a municipal bond listing. If you need to refresh yourself on how bonds work, FMSbonds provides good information.

Learn how to get your Series 7 so that you can manage municipal bond portfolios

Consider becoming a municipal bonds broker if you want to advance your career. You will have to take the Series 7 exam. Thanks to the Internet, you can order materials to help you prepare for this exam. For example, you can watch a video that will show you how government entities issue muni bonds. Not only will they show you how to do a municipal bond search, but explain general obligation and revenue bonds.

I recommend: Series 7 Test sells a video on municipal bond securities. You will learn about the MSRB rules as well as the difference between general obligation and revenue bonds. Securities Training Corp. also offers comprehensive information on muni bonds. Not only will you learn about these tax-free municipal bonds, but you will get a solid understanding of the relationship between yields and prices.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Make sure you thoroughly understand the difference between general obligation and revenue bonds if you take the Series 7 exam. They make up more than 50 questions on the exam.