Municipal Bonds
W
hile some people might
have the perception that
municipal bonds are
for investors who are in or near
retirement, many investors who
are still in their "working years"
are now considering municipal
bonds as an appropriate wealth
preservation tool.
willing to accept. As with other
fixed-income securities, municipal
bond prices fluctuate in response
to changing interest rates: prices
increase when interest rates
decline, and prices decline when
interest rates rise. It's easy to
understand the reasons:
• When interest rates fall,
new issues come to market
minimum tax (AMT), income
from certain "private purpose"
municipal securities is included
when calculating the tax.)
Should investors move into
bonds now? The answer—like all
investment decisions—depends
on each individual's situation.
Let your investment objectives
determine whether or not you
buy bonds in the first
place and let the market
conditions influence
which bonds you buy.
Tax-exempt municipal
bonds have become one
of the most popular
types of investments.
They offer an array of
Rob Levy is a Wealth
benefits, including:
Advisor and Senior Vice
• Predictability. Bond
President — Investments
buyers know how
at UBS Financial Services
much they will earn,
in Farmington Hills.
and how long it
For more information, he
will be before their
can be contacted at (248)
principal is returned.
737-5477 or robert.levy@
Interest is paid
ubs.
corn.
semi-annually, and
As a firmn providing
bondholders receive
wealth management
their principal intact,
services to clients in
when the bonds
the U.S., we offer both
mature.
investment advisory
• Relative Safety.
programs and brokerage
Investment grade
accounts. Advisory
municipal bonds have
services
and brokerage
an excellent history of
services are separate and
creditworthiness.
distinct, differ in material
• Tax Free Interest.
ways and are governed
The interest earned
by di erent laws and
on most municipal
Levy,
Senior
Vice-President-Investments
Robert
separate
contracts. For
bonds is exempt from
more information, please
Federal income taxes,
visit our website at «www.ubs.
with lower yields than older
and may be exempt from state
com/workingwithus»
securities, making the older
taxes in the issuer's state, as
The information contained
securities
worth
more;
hence
the
well.
herein is based on sources believed
increase in price.
• Liquidity. Should the need
to be reliable, but its accuracy is
• When interest rates rise,
arise, an investor can generally
not guaranteed. UBS Financial
new issues come to market
sell almost any investment
Services
Inc. does not provide tax,
with
higher
yields
than
older
grade municipal bond quickly.
legal
or
accounting
advice. Please
securities, making the older
• Variety. With over 1.5 million
contact your tax advisor regarding
ones worth less; hence the
municipal bonds outstanding,
the suitability of tax-exempt
decline in price.
investors are usually able to find
investments in your por t folio and
the maturity and credit quality
your
accounting advisor to determine
Bonds held to maturity are
that matches their investment
the appropriate accounting
redeemed by the issuer at
objectives.
treatment. Income from municipal
their face value—regardless of
• Reduced Portfolio Volatility.
prevailing interest rates. Investors bonds may be subject to state and
Adding municipal bonds to a
local taxes as well as the Alternative
who sell municipal bonds before
portfolio of all equities may
Minimum Tax. Call features may
maturity may find themselves
improve overall portfolio
exist that can impact yield. If sold
with a capital gain or loss.
stability.
prior to maturity, investments in
Although income generated by
municipal securities are subject to
most municipal bonds is exempt
Understanding Market Risk
gains/losses
based on the level of
from taxes, any capital gains
Tax-exempt municipal bonds
interest rates, market conditions and
earned from the sale of these
offer the chance to maximize
credit quality of the issue?:
bonds are subject to taxation. (If
your after-tax return consistent
you are subject to the alternative
with the amount of risk you're
This article has been written and provided by UBS Financial Services Inc. for use by its Financial Advisors.
ADVERTISEMENT
*UBS
UBS
Financial
Services Inc.
Names
Robert G.
Levy To
President's
Council
Farmington Hills, MI 1/5/10 — UBS Fi-
nancial Services Inc. announced today
that Robert G. Levy, a Senior Vice Presi-
dent — Investments, has been named a
member of the firm's President's Coun-
cil. John Bush, the Farmington Hills
branch manager, said this distinction is
awarded to their firm's top-producing
financial advisors in the country.
Rob Levy, who joined the firm in
2000, has 27 years experience in the
securities industry. Previously, he was
a Senior Vice President with Prudential
Securities.
He supports and feels strongly about
many local charities including the Coli-
tis Foundation, Michigan Humane Soci-
ety and the Jewish Federation. He lives
in Franklin with his two children.
Wealth Management Americas
provides advice-based relationships
through its financial advisors who de-
liver a fully integrated set of products
and services specifically designed to ad-
dress the needs of high net worth and
ultra high net worth individuals and
families. It includes the former Wealth
Management US business area as well
as the domestic Canadian business and
the international business booked in
the United States.
The Farmington Hills office is located
at 32300 Northwestern Hwy., Ste. 150.
Their telephone number is (248) 851-
1001.