CPAs and financial planners have long advised many individuals to invest in municipal muni bond securities -- an investment that generally provides a high degree of principal safety while avoiding taxation. These investments are typically made through the use of municipal bond funds. Nevertheless, when investing in tax-exempt securities, investors are quickly confronted with a host of often conflicting goals. Major tax and investing issues need to be evaluated simultaneously when selecting an appropriate tax-exempt asset class. State-specific municipal bond funds can come with added risks. Several interrelated risk are: 1. state-specific risk, geographical concentration, and issuer-specific risks, 2 principal and credit risks, 3. income risks, and 4. lack of diversification risks. Investing in a state-specific municipal bond fund is likely not advisable at the present time. Regardless of the ultimate outcome, it is not worth the risk to most mainstream investors. Those already invested in state-specific funds should consider steps to limit their risk exposure.