What the experts say

Not your mama’s munis

The “usually steady” municipal-bond market has “been a mess lately,” said Ben Levisohn and Eleanor Laise in The Wall Street Journal. Although a “freakish confluence of events” was to blame for a November sell-off, the market’s troubles go far deeper. “Before the financial crisis there was one municipal-bond market.” Now the market is so fragmented that investors can’t assume “that any of its 20,000-plus issues will trade like the others.” Few muni bonds are insured these days, credit quality and value are more difficult to gauge, and liquidity isn’t what it used to be. High-quality muni bonds should still have a place in investors’ portfolios. Yet given all the uncertainty, “investors should spread their bets widely” when investing in individual bonds—“even if it means giving up in-state tax benefits.” An ordinary muni-bond mutual fund provides diversity, too.

Year-end to-do list

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Financial planning may not be high on your holiday agenda, but with a few year-end moves, “you can save some serious money,” said Money. Start with your portfolio. “If you have deadbeat stocks you don’t want, get rid of ’em.” You can use the losses to offset gains and income up to $3,000, and then carry any leftovers to next year. If you’ve been toying with converting your traditional IRA to a Roth, switch in 2010 if you think your income tax rate will increase next year. Also note that “for 2010 swaps only,” you can delay paying related taxes until 2011 and 2012. One thing worth putting off: going in for a checkup. “Under health-care reform, most employer insurance plans must offer free preventative care starting in 2011.”

Big returns at the fridge?

It sometimes seems as if it would be better to put your money in frozen peas than in a savings account, said Jack Hough in SmartMoney. While savings accounts and certificates of deposit have paid next to nothing, prices of certain food items have seen noticeable increases in the past year. Butter, which is up about 25 percent, has appreciated as much as gold; “even hot dogs are up more than 4 percent.” But don’t get crazy stocking your pantry or freezer to guard against inflation. Most food has a limited shelf life, even if it’s canned or frozen, and “food prices are notoriously volatile.”