Over the past few years, municipal bonds may have fallen out of favor due to the fact that, until recently, the returns in the stock and bond markets were generating steady returns. But ever since tax reform, 2019 has brought an unusually large stampede of investors into the $3.8 Trillion market for state and local governments for one simple reason: to pay less in taxes.
If you’re a beginning investor, it’s likely you’re concentrating on building your portfolio. But as important as it is to build that portfolio, you should also ensure that it’s diversified.
Why is a diversified portfolio so important?
There are three key reasons why diversifying is important: