Authored by www.1861capital.com/municipal-arbitrage.html
If a client’s primary investment goal is to preserve their capital while creating a tax-free income stream, municipal bonds may be worth taking into consideration. Municipal bonds, or munis, are debt commitments distributed by government entities.1861 Capital anticipates that their clients are diligent when purchasing municipal bonds. Our clients are informed that when these types of bonds are purchased, the money is being loaned to the issuer in replace of a regulated number of interest payments over a fixed time period. When that period is over, the bond is considered “matured”, and the total sum of the original investment is returned to the purchaser. 1861 Capital reviews the components of bonds in hopes that clients will eventually feel secure enough, in their own understanding, the workings of municipal bonds and purchase them at their discretion.
1861 Capital are on familiar terms with what investors are subject to such as “alternative minimum tax” or AMT, that incorporates interest earnings from particular municipal bonds when estimating tax. Even though municipal bonds are available in either taxable or tax-exempt formats, the tax-exempt bonds eventually receive the majority of the attention, for the reason the profits they produce is for many investors exempt from federal and, in many instances, state and local taxes. .
Before 1861 Capital clarifies any further about municipal bonds, clients and potential clients should be informed of the two varieties offered. There are Revenue bonds, and General Obligation bonds or “GO.” General Obligation bonds, are distributed to increase immediate capital to deal with expenses, and sustained by the taxing strength of the issuer. Revenue bonds, which are distributed to finance infrastructure projects, are provisioned by the earnings generated by those projects. Either bond is tax exempt and chiefly appealing to risk-averse investors. In the current economic client, 1861 Capital understands investors reluctance to invest in various bonds or investments. Conversely, due to the high probability that the issuers will repay their debts, Municipal and Revenue bonds have been deemed quite safe.
Our company 1861 Capital, recognizes that there are risk factors inherent in the most minute transactions. Even though buying Municipal bonds is considered a moderate investment strategy, it’s not without risk. Are Municipal bonds the right kind of investment for you? 1861 capital has distinguished itself as a capable financial institution, who guides clients with their sound professional investment strategies and gladly share their expert investment knowledge.
1861 Capital reviews the best investment possibilities and passes this knowledge on to their clients.