Perspective for Advisors
According to our regression analysis, over the past 10 years (as of 12/31/2020), the correlation between tax-exempt municipals and taxable treasuries was high at roughly 88%, but municipals displayed lower volatility. Our regression analysis showed that for every 100 basis points (1.00%) increase in the 10-year treasury yield, the mean increase in the 10-year municipal yield was 0.82%. Furthermore, municipal yields are less correlated relative to corporates which…
The first half of 2022 is one of the few market environments in recent history where all major asset classes suffered. The Novel Investor blog’s Asset Class Returns captures this nicely noting “cash” outperformed with a +0.2% return. “HG Bonds” (high-grade bonds) came in an uninspiring second place at negative 10.4%, while the S&P 500 was down 20.57% through this period. Returns have improved since this data was posted as stocks have rallied and bond yields have generally decreased, thereby increasing prices. However, the economy is giving us mixed messages about its underlying health, while inflation pressures persist. The latter causes the Federal Reserve to remain aggressive in its tightening policies by increasing short term rates and further reducing its almost $9 trillion balance sheet. Overall, this creates a very complicated investing environment and a highly uncertain future….
THANK YOU. We wish you and your family a healthy and prosperous 2022 and offer our profound “thank you” family a healthy and prosperous 2022 and offer our profound “thank you”. For nearly four decades, our investors have provided billions of dollars in capital for infrastructure projects across the nation.
Municipal Bonds: Local Impact
Investors flock to municipal bonds for yield and shelter - June 22, 2021
Bernardi Securities & Bernardi Asset Management move into a new headquarters location! - May 25, 2021