Income Investor Perspectives

Most bond market yields are now higher on the year–a good thing for investors who have been waiting on higher rates and more income, but a painful turn of events for investors in mutual funds who will be seeing declines in their NAVs. Is it time to capitulate and sell? Or, is it time to buy? One answer does not fit all, but the answer does depend on your time horizon–for investors, the answer is different from traders.

This week and the following two weeks will be good indicators of what the new trading ranges will be–there are no holidays or elections to distract market participants, so with more normalized volume, it will be interesting to see where the market finds equilibrium. The week after the election, trading volume was unusually heavy–average daily par amount traded was 27% above the current seasonal* (post-Labor Day) average while last week, volume was unusually light–26% below the seasonal average.

Click here to the this week’s Muni Catchup:

• Rates Continue to Backup–will they attract buyers?
• The Tide Has Turned–will the heavy outflows from bond funds continue?
• Did You Read About Dallas? Has a new fault line emerged in the muni market?
• Supply–will new issue muni supply increase under President Trump?
• The Bottom Line

Self-directed investors are putting themselves at risk if they are not doing their homework and surveilling the credits in their portfolio.

From “A New Fault Line in the Muni Market?”

This is not investment advice. The opinions expressed and the information contained herein are based on sources believed to be reliable, but accuracy or appropriateness is not guaranteed and are subject to change without notice. Past performance is interesting but is not a guarantee of future results. Investments in bonds are subject to gains/losses based on the level of interest rates, market conditions and credit quality of the issuer. Indices are not available for direct investment, although in some cases, there may be ETFs available designed to track some of the indices shown. The author does not provide investment, tax, legal or accounting advice. Investors should consult with their own advisor and fully understand their own situation when considering changes to their strategy, tactics or individual investments. Additional information available upon request.
©2016 Patrick F. Luby
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