Rising rates have beaten up muni bond prices for years, and that pain might actually be an opportunity. Nearly every national intermediate muni bond fund has posted negative price returns over the past five years, even though total returns stayed positive thanks to income more than covering the price drop. That combination is a tax loss harvester's dream: investors can sell at a price loss, offset gains or taxable income elsewhere, and roll right back into munis without giving up the tax exempt income stream they were after in the first place. Vehicle choice matters here too. ETFs have distributed a capital gain far less often than mutual funds in the same muni categories over the past five years, meaning the redeployment itself can add another layer of tax efficiency. The one catch is the wash sale rule, which blocks claiming the loss if you buy a substantially identical bond within 30 days on either side of the sale.

Finsum: A multi year losing stretch in muni bond prices is exactly the kind of setup that gets ignored because nobody likes admitting a position is underwater.