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Municipal Bonds: The Best Income Investment of 2014?

The bond market has been a scary place to invest lately, with soaring rates causing losses in 2013. But in 2014, municipal bonds are starting to look appealing, especially to investors who can benefit from their unique tax advantages.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, discusses municipal bonds. He notes that muni bonds are in the unusual situation of yielding more than comparable Treasuries, even though Treasury bonds are taxable while munis are free of federal income tax. Despite the perceived risk from high-profile bankruptcies like Detroit, many muni bonds are backed by insurance companies, with Assured Guaranty (NYSE: AGO  ) and Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) among companies insuring munis right now. Dan concludes by looking at some ways to get exposure to munis, including the iShares AMT-Free National Muni ETF (NYSEMKT: MUB  ) and similar state-specific investments.

Another way to get income from your portfolio
Muni bonds might look smart right now, but one of the dirty secrets that few finance professionals will openly admit is that dividend stocks as a group handily outperform their non-dividend paying brethren. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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9/2/2015 1:07 PM
AGO $25.98 Up +1.18 +4.74%
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BRK-A $199019.75 Up +875.45 +0.44%
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Berkshire Hathaway CAPS Rating: *****
MUB $108.93 Down -0.02 -0.02%
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