Tis the season for municipal bonds. Last fall, tax-free rates nearly equaled the taxable-rates on bonds. From early November to early December the spread between 10-year taxable and the same term muni bonds narrowed to 90 percent. The bond markets were under pressure and municipals performed as usual. They fluctuated less than their taxable counterparts.

"Over time I’ve found munis to fluctuate at least a third less than equivalent taxable bonds," said Harris May, president, Strategic Partners Investment Advisors, Tarrytown, N.Y. May left a long-term career in institutional bond management 18 months ago to create a new firm managing separate accounts. His firm targets accounts of $750,000 to $1 million.

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