Mar 28 2009
Municipal bond funds and Sector funds Investment
? Municipal bond funds invest primarily in debt issued by state and local governments. Those who buy funds that invest in the debt of their home state are likely to find that the income earned on these accounts is firee from both state and federal taxation.
Risk: Moderate
Potential for capital appreciation: Low
Potential for current income: Moderate
? Sector funds invest in specific industry groups. You would buy a sector fund if, for example, you wanted to participate in the fortunes of just the technology industry, or just the health care industry, or just Net stocks. These funds are highly volatile and relatively undiversified. They are suitable for people who want to take a piece of their assets and gamble a bit.
Risk: Very high
Potential for capital appreciation: Very high
Potential for current income: Very low
