If you're on the “Main Street” side of the debate with Wall Street, you may be interested in investing in your community while seeking long-term financial returns. Lieber recommends looking at municipal bonds as a partial replacement for stock market mutual funds. While cities and states rely on bonds to attract investors, particularly when tax revenues aren't enough to fund infrastructure improvements or economic development projects, mutual funds that invest broadly in municipal funds can add social responsibility and profit to your portfolio.Municipal bonds, however, are cozy with Wall Street. Large, for-profit investment companies often work closely with state and local governments to manage the individual bonds. Governments would not be able to get the capital they need without these banks, and the companies have an opportunity to make quite a bit of money from the deals with governments. This shouldn't dissuade you from investing in municipal bonds. Economies improve when the financial institutions within those economies thrive. If you're vehemently opposed to anything that might give an advantage to a company identified with Wall Street, however, municipal bonds won't give you much separation.
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