Despite the negative drumbeat of negative press about the state of municipal finance in the United States, we believe the risk to our clients’ municipal bond portfolios is extremely low.
State and local governments, feeling the impact of the economic turmoil of the past few years, are currently struggling with significant budget deficits. This has given rise to a number of pundits and financial columnists warning about an impending collapse of the municipal bond market. As the most significant holding in our clients’ aggregate investment portfolios, we are understandably concerned about the state of municipal finance in this country.
However, our view is much less dire than the extremist “doom and gloom” authors. We continue to believe that intermediate term, high-quality municipal bonds provide the best solution for high tax-bracket investors looking for principal protection and predictable income. This article provides some additional information supporting our views about municipal bonds that is intended to be a counterbalance to many of the sensationalist articles currently in circulation.Read the PDF