Suppose you believed that a particular state was going through a rough patch, because of which its worth has been grossly undervalued. Or that the economy of a particular state is likely to boom in the coming years. How and using what instruments would you use to trade on this idea? Municipal bonds? but arent municipal bonds the least riskiest and hence likely to produced the least reward as well? If it was a country I would invest in its gross market index, I dont know of any instrument that would represent the economy of a state. http://www.economist.com/node/21542445 http://www.economist.com/node/21542448