One of the more popular investment strategies during tough economic times is to turn to bonds.
Bonds are considered relatively safe, when you invest in entities that are highly rated and stable. Since you are supposed to get your principal back (barring a default), plus a small amount of interest, many people like the idea of bonds.
A type of bond that has seen an increase in popularity recently is the municipal bond.
Municipal bonds are issued by localities. They often come with higher yields than Treasury securities and even many corporate bonds. On top of that, there are tax advantages to investing in municipal bonds.
But before you decide to take the plunge with municipal bonds, make sure that you understand how they work, and the types of risks involved.