Grade Your Muni Bonds With Online Tools

If your investment portfolio contains muni bonds, take advantage of free online investing tools to determine whether or not the investments are worth keeping. While muni bonds are typically a low-risk investment, tracking your bonds allows you to maximize your investment potential. If a bond drops below your goal, you can sell it. If you think the bond will recover, you can hold on to it. Online tools combine professional analysis with applications in order to provide you with resources you can use to evaluate your munis.

When you use an online grade report for municipal bonds, there are several factors, including the market value, income stream, duration, and market sector, it can evaluate. The market value provides you with a grade based on the credit risk for bonds at market price. The higher the risk, the lower the grade. Income stream considers the maturity dates and evaluates how often you receive payments from your munis. Duration analyzes how long it will take for a municipal bond to repay you for the initial investment. With an evaluation of the market sector, a grade report considers whether or not your portfolio contains a blend of revenue bonds and general obligation bonds.

Along with the previous factors, a grade report may evaluate your diversification. Having bonds with different Committee on Uniform Security Identification Procedures (CUSIPs) can reduce your risk as an investor. If one CUSIP fails to repay your bond, you still have other investments with the potential to bring in a positive yield. Other ways to diversify your portfolio include working with different issuing organizations, picking muni bonds from different geographic areas, and varying the dollar value for initial investments. By grading all these factors, you better prepare yourself to make money from your investments.

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