Perspective for Advisors
Here are two portfolio strategies we find attractive in today’s municipal market: 1) Tax Loss Swaps and 2) Discount bonds trading at relatively attractive yields. Selling bonds is an infrequent exercise for most income-oriented investors. However, when bond losses present themselves on paper, it may make sense to capture them. Losses have arisen due to the significant increase in yields (leading to lower prices) over the past two years. Investors can use up…
Yields moved up precipitously during the month of September as the AAA rated 10-year municipal has moved from 2.85% on August 31st to 3.52%  today. 3.52% is equivalent to a taxable rate of 5.58% calculated at the 37% bracket. This bond selloff (higher yields) has pulled the 10-year treasury to 4.84% as of this morning after a great jobs report. This is its highest level since 2007 – pre Great Financial Crisis. The underpinning of the selloff is the i.) market’s “higher-for-longer” forecast of Federal Reserve policy ii.) a resilient economy in the face of significant rate hikes over the past year and a half and iii.) a potential supply/demand imbalance for treasuries.
Municipal Bonds: Local Impact
BAM Awarded “Top Guns” status – High Income and Intermediate Taxable - May 25, 2023
Bernardi Asset Management Awarded Manager of the Decade & Top Guns Status - February 22, 2023