"Investors should not forget that we tend to have the best news at market tops and the worst news at or near the bottoms; that means that a rising tide of bad news is an important part of the bottoming process," explains Keith Fitz-Gerald.

Emphasizing the need for patience in the current environment, the editor of The Money Map Report is maintaining a diversified portfolio including several quality income-oriented positions from Nuveen, PIMCO ad Vanguard. Here's a trio funds for safety and income.

"Nuveen Quality Income Municipal Fund (NYSE: NQU) seeks current income exempt from regular federal income tax. A lot of folks are fleeing munis right now because they're fearful of the credit crisis and an anticipated wave of municipal defaults.

"What makes NQU appealing is that it concentrates substantially all of its assets in a diversified portfolio of AA federal tax-exempt investments, which gives it an added safety cushion. Right now the taxable equivalent distribution rate is 9%.

"And don't forget: Right now it's selling at 7.97% below its net asset value. This gives us a super way to potentially achieve over 16% this year. That's especially appealing given how the markets are behaving lately.

Continue reading 'Money Map' to safe returns: A trio of income funds

'Money Map' to safe returns: A trio of income funds originally appeared on BloggingStocks on Fri, 05 Dec 2008 11:11:00 EST. Please see our terms for use of feeds.

"We're taking a hard look at municipal bonds," says Keith Fitz-Gerald. In The Money Map Report, he adds, "Our favorite play is Nuveen Quality Income Municipal Fund (NYSE: NQU).

"If you have been thinking about putting some new cash to work, now's a great time to do so. In general, municipal bonds are about as cheap as they've been in decades.

"Munis are really very simple instruments. When most states, cities or even counties engage in large-scale construction projects, they typically issue debt in exchange for the money they need in the form of a municipal bond.

"Because the Fed considers them tax-free instruments, munis with lower rates can actually equal far higher taxable yields. For instance, a 3%-to-5% tax-free note can be equal to a taxable one of 5% to 7% under normal circumstances, particularly for investors in higher tax brackets.

"But these are hardly 'normal' times. Especially when you consider that many munis are actually paying more than taxable treasuries at the moment.

"Our favorite play is the Nuveen Quality Income Municipal Fund, which is paying a juicy 5.60% tax free at a time when 10-year treasuries are offer a taxable 4.10%. Put another way, in order to equalize the two, we'd have to find a taxable yield of 7.82%.

Continue reading Municipal bonds: An Obama bet?

Municipal bonds: An Obama bet? originally appeared on BloggingStocks on Tue, 29 Jul 2008 13:32:00 EST. Please see our terms for use of feeds.