Income investors just received a gift from the market…

Right now, you can earn a SAFE 6% yield on your cash.

You don’t have to take a big risk to earn this yield. You don’t have to open a new bank account. You don’t have to invest in a foreign currency. But if you’re interested, you need to act soon.

The opportunity won’t last long…

[ad#Google Adsense 336×280-IA]For the past three years, I’ve been one of the few investment advisors to continually “pound the table” on municipal bonds.

They’ve been – and will continue to be – a great deal for income-seeking investors.

As you probably know, municipal bonds are loans made to state and municipal governments.

To encourage folks to invest in the government, interest received from “munis” is exempt from federal income tax and, in many cases, state and local income taxes.

This makes them a great way to earn investment income… and keep it from the taxman. And right now is one of the best times in the last 12 months to buy a fund of these bonds.

Over the past few months, investors have fled municipal bond funds. Some of the top funds I follow have sold off 8% (a huge short-term move in “boring” bonds). There are several reasons for this selloff…

One, munis enjoyed a rally in December as fears wore off that they would lose their tax-exempt status… and then a reflexive selloff after the New Year followed.

Also, munis trade at a spread with Treasurys (10-year government bonds). Treasurys usually have to pay higher yields than munis to make up for the tax you have to pay on Treasury income. And the yield on 10-year Treasurys has started to increase, making them more attractive to some investors.

Another reason for the selloff is the stock market charging higher. “Hotter money” has perhaps moved out of bonds and jumped into stocks.

One of my favorite picks to invest in munis – the Invesco Insured Municipal Income Trust (NYSE: IIM) – hasn’t been immune to the selloff. Since the start of this year, IIM has fallen about 8.2%, as you can see in the chart below…

This selloff has created an opportunity to buy these valuable bonds cheaply…

When I look at the value of a fund, I look at the net asset value (NAV). The NAV is computed by taking the total value of a fund’s securities and then dividing by the number of shares outstanding. I prefer to invest in funds that are trading at a discount to their NAV.

Right now, IIM is trading at a 6.3% discount to its NAV. That’s like paying a little more than $0.94 for $1.

And there’s no reason for this discount. These funds will continue to pay out their distributions, just like they always have. And because there’s very little turnover in these funds, they won’t suffer as much if interest rates rise. For example, IIM’s turnover rate is just 13%.

The thing to do here is forget about the price action and focus instead on the income you’re getting. As I’ve showed you before, state and municipal finances are in much better shape than the “doom and gloomers” would have you believe. If you can remember that, you can start earning a safe 6% right now.

Already, IIM and similar funds are rebounding from their deeply oversold levels. So this opportunity may not last.

To take advantage of it, all you need to earn this 6% is a basic online brokerage account… and the names of the best municipal bond funds. Right now, they’re on sale… and yielding 6%, tax-free.

Here’s to our health, wealth, and a great retirement,

Dr. David Eifrig

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Source: DailyWealth