state and muni bonds are federal income tax free, and are state income tax
free in the state of issue but not elsewhere. 3-4% translates to 4-6% pre-
tax depending on your tax bracket, which is quite good compared to the
treasury or the CDs. there is a good article in today's wall street journal
on page c14 talking about ca munis.
what you need to do is to put some munis in excel, and run a few scenarios,
for instance, what if the interest rate goes up to 1-3% in the next 12, 24
or 36 months. as