Entries by Matt Bernardi

Ron Bernardi quoted in InvestmentNews

Six months after the sweeping tax-reform package that cut corporate and individual rates rattled the $3.7 trillion municipal bond market, financial advisers say the fallout has proven to be a good thing for investors… Read more here  

The Accumulation of Debt

July 5, 2018 By Matthew P. Bernardi  “[Avoid] likewise the accumulation of debt”. – George Washington Since the financial crisis, municipal bonded debt outstanding has increased at a snail’s pace of 0.51% per year.[1] With corporate debt growing at an annual pace of 5.33% and Treasuries at 10.18%, it appears the average municipal government has […]


Market Review – Spring 2018

Below please find the our portfolio management team’s Spring 2018 Municipal Market Review. This provides an overview of current market conditions and information about our total return and goals-based strategies.  If you would like additional information about our process or specific strategies, please let us know. 2018 Spring – Bernardi Market Review

The Cost of Owning Municipal Bonds

There are two possible ways an investor pays to access the municipal bond market and portfolio management services for a separately managed account: One-time transaction cost model (markup/down) Annual fee model As a hybrid-firm (broker-dealer & registered investment advisor), Bernardi Securities (BSI) offers a choice of fee-only and one-time transaction platforms to our portfolio management […]

Why Warren’s Advice May Be Wrong for You

Warren Buffett’s annual letter is one of the best insights into the mind of perhaps the greatest stock picker in history. His letters offer a great window into how he built a $500 billion conglomerate of businesses from a mere, mid-size textile manufacturing company. Today, Berkshire Hathaway intersects with our lives in myriad ways from auto insurance to underpants to home brokerage services. The man, however, is not without his biases as it pertains to financial markets and asset allocation, including a distaste for active stock management, investment bankers, and bonds.

Tax Reform and Its Impact

Tax reform largely left the municipal bond market intact, though a bit squeezed, and it remains an attractive space for individual investors. We are satisfied with the outcome and are also grateful as American citizens and taxpayers that Congress largely left the market unhindered in its ability to fund the bulk (~75%) of our nation’s infrastructure.

Natural Disaster: Event Risk in Today’s Municipal Market

The tragic storms over the past months highlight the concept of “event risk” investors face while investing in the municipal bond market. Event risk is a term more closely associated with the stock or corporate bond markets, where an underlying credit can be significantly impacted on a short term basis by an unforeseen event. Substantial credit deterioration in the municipal market traditionally resembles a slow moving train wreck (e.g. Detroit, Puerto Rico, Hartford).  That said, events like Irma, Harvey, and Maria can create massive shocks to the system, potentially impairing fiscal balances enough to create distressed credits from an otherwise healthy or stable state. What can we learn from such events and their impact on the municipal market? Also, how does sound credit analysis account for such risk?

The Cost of Waiting for the “Right Hand” of Cards

The post-crisis monetary policy reaction pushed interest rate markets into unchartered waters of zero interest rate policy (ZIRP). We have all become somewhat deadened to this reality over the last handful of years as monetary policy has led to heightened market valuations, paired with one of the longest periods of economic expansion (93 months) in our economic history.

Municipal Pension Liabilities: Between a Rock and a Hard Place?

By Matthew P. Bernardi Municipalities have done an excellent job since the financial crisis in stabilizing their finances and have pulled a number of levers to reduce fixed costs. Today’s low growth environment calls for prudent management and the average municipality has taken a conservative approach, especially relative to corporations. That being said, this low […]