Entries by Ronald Bernardi

Throwing the Baby Out with the Bath Water?

As of this writing, the State of Illinois began its fiscal year (July 1) without a budget for an unprecedented third year in a row. Sunday evening the Illinois House of Representatives approved a $36 billion spending plan that increases personal income taxes to 4.95% from the current 3.75% level and the corporate levy to 7% from 5.25%. If the Senate, which approved a tax hike last month, concurs on the House bill it will be presented to the governor for consideration. He has stated he will veto both the House and Senate spending bills as currently written.

Vexing Bond Market Questions

This chart demonstrates the volatility of the 10 year U. S. treasury bond since the beginning of 2016.

This volatility causes anxiety for many and understandably leads to several questions:

  1. Will long term bond yields increase as the Federal Reserve Bank increases its overnight lending bank rate?
  2. Should one invest in bonds now or wait until rates rise further?
  3. What is a proper equity/bond asset allocation given this volatility?

These are pertinent questions and are often posed to our Investment Specialists and Portfolio Managers during the course of a week

Ides Of March 2016 – Et Tu, Puerto Rico?

By Ronald P. Bernardi IDES OF MARCH 2016 – ET TU, PUERTO RICO? The Ides of March, the 15th of the month, represents the monthly midpoint of the Roman calendar.   Julius Caesar was assassinated on the Ides in 44 BC by his friend Marcus Brutus and others.  As he lay dying, Caesar uttered these words […]

RE: “How Muni Bonds ‘Yield’ 4% in a 2% World”

By Ronald P. Bernardi Let’s slow down a bit before jumping to conclusions. Here are several observations about the October 30th, Wall Street Journal article How Muni Bonds ‘Yield’ 4% in a 2% World. Author Jason Zweig makes a valid point in asserting that yields cited in a typical custodian brokerage account statements may be […]

Turning 30 — A Milestone Year

By Ronald P. Bernardi We thank our clients and others who count on us and wish everyone a healthy and prosperous 2015. This past November marked the beginning of our thirtieth year in business. Today, I want to share a few thoughts with you, some of which I’ve been reflecting on for a long time. […]

Municipal Securities as High Quality Liquid Assets (HQLA)

By Ronald P. Bernardi For many months, we at Bernardi Securities have closely followed the issue of municipal securities and their status as a high-quality liquid asset (HQLA) for commercial banks and nonbank systemically important financial institutions, or SIFIs (those with total assets exceeding $250 billion). We have been adjusting our portfolio management strategy somewhat […]

Will Detroit turn BOND upside down?

By Ronald P. Bernardi   Will the Detroit Chapter 9 bankruptcy turn the municipal bond world upside down? A random vacation photo captured this concern fairly well. With such a big question looming over the market, let’s review the ways in which the largest municipal bankruptcy in our nation’s history may set precedents for municipalities […]