Income Investor Perspectives

When should municipal bond investors consider mutual funds instead of individual bonds?

How about muni bond ETFs?

And where do muni bond Closed End Funds fit in?

Or SMAs? Wrap accounts? Model portfolios?

Is it OK to mix and match?

How do you employ the range of municipal bond investment products? Have you ever wondered what your peers do? Here’s a chance to find out.

For an upcoming article, I will be addressing the above questions and more, but to help make the content as relevant as possible, I’d like to hear from you! Please take a minute or two to complete this survey about Municipal Bond Market Investment Preferences.

The more input, the better, so please forward this survey to your colleagues. If you would like to be notified when the article is published, you can subscribe at the bottom of the page. Hopefully, you’ll find that your two minute investment results in some valuable insight.

Most municipal market investors and their advisors would agree that liquidity in the municipal bond market has declined in the last several years.

Some participants in the traditional over-the-counter municipal bond market have been wondering if the growing popularity of municipal bond ETFs has been draining liquidity from the market for individual bonds.

An analysis of municipal bond ETF flows suggests that rather than draining liquidity from the municipal bond market, muni ETFs (the first of which came to market in 2007), have in fact attracted new liquidity to the marketplace.

Read the complete article on ETF.com

Are your smarter than the Magic 8-Ball?

-or-

Are you smarter than an FOMC’er? (Part2)

The Dot Plot has been circulating, and the big takeaway for me is not how many rate hikes we should see this year, but rather the diversity of opinion about where rates will be.

As I’ve noted before, even the members of the FOMC are not of one opinion, with participant’s assessments for the end of this year ranging from .875% to 2.125%. (The weighted average opinion is 1.29%.)

Which opinion is correct? Are any of them correct? There are so many variables at work, forecasting rates with precision is not realistic.

Yes–it makes sense for traders, hedgers and many others to be concerned and focused on the short-term movements in rates. But for investors, trying to time rates means that you are likely exposing yourself to higher risk by not being properly diversified.

If you really want to accurately forecast rates, read my article on how to do it.

Or, for a short-cut, ask The Magic 8-Ball. (If the answer is anything other than “Reply hazy, try again,” don’t rely on it.)

Happy New Year!

I don’t make a list of the best books of the year…I prefer to just keep a list of the best books. Last year, two new books earned spots on my list:

• Adventures in MuniLand by Michael Comes, David Kotok and John Mousseau of Cumberland Advisors.
• DollarLogic by Andy Martin. An excellent guide to helping investors conquer risk.

See my Book Recommendations page to read about why I like these two books.