With the Federal Reserve likely to leave interest rates near record lows for at least another six months, what's an income-oriented investor to do?

Take a look at municipal bonds, says MarketWatch columnist Howard Gold. The Barclays Municipal Bond index has returned 8.4 percent so far this year.

"Conservative investors need good yields. They need protection from higher taxes. And they need to know their principal is safe in a chaotic world," Gold writes.

"What offers the best combination of these three qualities? Municipal bonds, which can produce the equivalent of 3 percent to 5 percent taxable yields, with much less risk."

While you may have been scared off by last year's bankruptcy of Detroit and the financial troubles of Puerto Rico, the finances of most states and municipalities have improved remarkably since the recession ended in June 2009, Gold notes.

The default rate for munis registered a microscopic 0.1 percent in 2013, according to Standard & Poor's. That amounts to 1/20th the default rate of high-yield corporate bonds.

To be sure, the run-up in muni prices this year raises valuation questions, experts say.

"It's difficult to find real value in the muni market these days, but if you already own munis, you should stick with what you own, because it's hard to replace that income," Jim Kochan, a senior investment strategist at Wells Fargo Advantage Funds, tells Barron's.

If you have new cash to invest, wait for munis to correct, he suggests.

Related Stories:

• Nervous About Borrowing, US States And Cities Alter Municipal Bond Landscape
• SEC's Cross Says Shine a Light on Tax-Free Market: Muni Credit