Municipal Bonds

Anne N. Mathias is a senior strategist for Vanguard and a member of the firm's Fixed Income Group, with a focus on global macroeconomics, interest rates, and foreign currency. I spoke with her about the outlook for the economy and the credit markets.

It was a bumpy ride for corporate bond investors this year. After the sharp, pandemic-driven selloff in February and March, total returns for most corporate bond investments have climbed their way back into positive territory.

Whether you’re celebrating in-person or virtually, we’re wishing you and your family a Happy Thanksgiving! Giving thanks may seem difficult to do in a year that’s resulted in the loss of so many lives, jobs, and businesses, but we believe this holiday is the perfect time to reflect on all we are grateful for.

In our view, inflation-fighting asset classes look considerably cheaper and offer higher long-term estimated returns than mainstream stocks and bonds.

In calling the current market the third “Real McCoy” bubble of recent decades, Jeremy Grantham described, in his own words, what I call the Iron Law of Valuation: a security is nothing more than a claim on some set of future cash flows that investors expect to be delivered into their hands over time. The higher the price an investor pays today for some amount of cash in the future, the lower the long-term return the investor can expect on that investment.

I updated Bill Bengen’s groundbreaking analysis to examine the impact of investment expenses on historical retirement outcomes.

Ten-year Treasury bond yields may rise as high as 1.6% in 2021, reflecting prospects for faster economic growth.

Sinology explores how U.S.–China relations can develop under President-elect Biden administration in three key phases.

The latest Conference Board Leading Economic Index (LEI) for October was up 0.7% from the September final figure of 107.5. Investing.com predicted a 0.7% increase.

With yields near zero, many investors may question the value of fixed income within a portfolio. Western Asset’s Head of Product Management, Doug Hulsey, joins our Head of Equities, Stephen Dover, to discuss fixed income investing with an active-management lens. He makes a case for the asset class for investors in light of market uncertainties and outlines where he sees opportunities today.

He is not sure when it will happen, but David Rosenberg is confident investors will face another big correction in the stock market.

When the definitive story is written about U.S. financial markets during the coronavirus pandemic of 2020, expect America’s housing market to play a starring role.

The traditional “60/40” portfolio of stocks and bonds can be saved with a few modest tweaks.

A brief monthly update on what's happening in the municipal bond market.

In coming years, US Congress and the Biden administration could implement spending programs and tax reforms at the national level that trickle down into state and local government policies too. Our Katie Klingensmith joined Muni Bond Team Research Director Jennifer Johnston to discuss the potential implications for the municipal bond market, against a backdrop of COVID-19.

This short article investigates the rebalancing premium that investors may expect from risk-parity portfolios.

This article highlights the real golden goose behind retirement accounts – the immense value in not having to pay taxes on investment income and rebalancing.

America, and the world, received a huge shot of hope this week. The $210 billion drugmaker Pfizer announced on Monday that its coronavirus vaccine is 90% effective at preventing COVID-19.

Today we’ll talk about the political changes, what they mean for the economy, and then how the latest vaccine news may affect the outlook.

Actual third-quarter earnings may be less important than what business leaders say about their expectations.

Election results (a divided Washington) and good news on a potential vaccine boosted share prices, although there were some concerns about surging COVID-19 cases (163,402 reported on November 12) and possible difficulties in distributing the vaccine.

Bundling may help plan sponsors unlock alpha potential and supplement low returns from long Treasury bonds.

The Franklin Templeton–Gallup Economics of Recovery Study has heralded some interesting results in regard to the attitudes and behavior of Americans in response to the ongoing pandemic—and what developments could change both.

This is the fifth and last blog in our 2020 series, discussing why Russell Investments believes in the value of advisors. Here we discuss tax-smart planning and investing.

We’ve seen aggressive government and central bank support to stimulate economies sickened from COVID-19 slowdowns, but will the global economy right itself in 2021?

For years, hedge funds have blamed placid markets for their uninspiring returns. That excuse won’t fly this year.

Municipals posted modestly negative total returns in October, with the S&P Municipal Bond Index finishing the month down -0.14%. Interest rates moved higher as economic data remained firm...

States face revenue shortfalls from COVID-19 costs and shutdowns. We look under the hood to assess how some of the most indebted states are faring.

Global equity markets rallied on Monday after major networks declared Joe Biden the winner of the US presidential election, and early analysis of a COVID-19 vaccine from a large US drugmaker showed promising results.

Municipal bond defaults have been rising, but investor demand remains robust. This incongruence may suggest the municipal market is behaving irrationally, but we don't think that's the case.

A Joe Biden presidency, checked by a Republican-controlled Senate, may be just what emerging-market investors are looking for.

The strategy proposed here is to always invest in sector equity ETFs. I defined two super-sector groups, classified as aggressive and defensive, each with four sector ETFs which have historically performed best from November to April and relatively well from May to October, respectively.

Recent research shows how fixed annuities can add value in the context of retirement income. In addition to being able to guarantee income for life, tax benefits are often advertised as a key advantage of using annuities. This article discusses the mechanics of tax deferral in annuity products.

I want to discuss a recent WallStreet Journal article by Ruchir Sharma entitled “The Rescues Ruining Capitalism.” We talk much about the bailouts and stimulus programs related to the economic shutdown and pandemic. However, the bailouts began back in 2008 when the Federal Reserve intervened with the insolvency of Bear Stearns.

Businesses love Congressional gridlock. Tech stocks had been trending down for days before the election as they faced antitrust scrutiny, but now that it appears certain Congress will remain divided, they’ve recovered most of their losses. The tech-heavy Nasdaq 100 jumped close to 10% for the week.

Today I want to use the election to illustrate just how complex a seemingly simple situation can be. This matters not just politically, but economically as well.

The 2020 election dims the outlook for major legislation and aid to local governments, while central banks face the risk of a liquidity trap.

In an environment where interest rates are low and the risk of higher Treasury yields has risen, Portfolio Managers from Janus Henderson Investors discuss how allocations to AAA rated CLOs may help investors diversify a traditional fixed income portfolio, offering lower volatility, higher credit-quality and less sensitivity to any rise in interest rates.

Federal Reserve Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in coming months, saying that more fiscal and monetary support are needed as rising Covid-19 infections cloud the outlook for the economic recovery.

Reflecting on the post-election landscape, Jeffrey Gundlach expects a split government to emerge, with a Biden presidency, Democratic House and Republican Senate. That outcome explains the gains in U.S. equities this week, but stocks are now “really overvalued.”

Investors likely have many questions about the 2020 election. Votes were still being counted late Wednesday, but here are answers to some of the most frequently asked questions we’re hearing.

While the election remains too close to call, investor attention will soon turn back to Capitol Hill, where senators will reconvene on Nov. 9 and House members on Nov. 16 for what is known as a “lame duck” session of Congress.

Illinois voters defeated a measure that would have allowed the state to raise taxes on its wealthiest residents, striking down a pillar of Governor J.B. Pritzker’s plan for shoring up the state’s finances and preventing its debt from being cut to junk.

History does not repeat, but it rhymes, as Mark Twain observed. As such, we are struck by the eerie and dangerous parallels between today’s markets and the markets back in 1999. Back then, Value investing and Value managers were under the gun for having underperformed their Growth brethren for too long.

There are many major policy decisions that will influence the outlook—trade, energy, taxes and budget deficits, and pandemic relief. However, it’s difficult to assess how these issues will be addressed post-election, and even more unpredictable how the market will react.

In our latest Election Pulse, our Head of Equities Stephen Dover is joined by Franklin Templeton Fixed Income CIO Sonal Desai and Gallup’s Jonathan Rothwell to discuss survey findings on COVID-19 and its impact on the consumer. They discuss attitudes about vaccines, mask-wearing, and where they think the research may lead them post-election.

Just hours before the U.S. election got underway, investors pulled the most cash ever from the world’s largest exchange-traded fund tracking corporate bonds.

So… who is right? Can we learn from history, as Santayana believes? Or has the past just set the table for what’s to come, as Shakespeare wrote? Is the future determined by the past, as Vonnegut argues? Or are the two unrelated, as the SEC requires fund managers to tell their prospective investors? We suggest that the answer to all of these questions is yes.

Coming into the home stretch of 2020, continued concerns about COVID-19 and the political environment persist and have been feeding risk-averse sentiment for many investors. Given the year the world has experienced, it’s not surprising people are focusing on portfolio risk mitigation.

BlackRock bond experts reveal the top themes driving our fixed income outlook. Learn the latest key risks and opportunities in today’s bond market.

The roller-coaster ride of 2020 still has a few twists and turns to navigate. But the massive policy response to the COVID-19 pandemic brought a quick, though incomplete, recovery. With volatility expected to continue, where can investors look for opportunities?

Head of Equities Stephen Dover joined Templeton Global Macro’s Katie Klingensmith and Fiduciary Trust Company International’s Gene Todd for a discussion about what they are keeping an eye on as investors.

Jeffrey Gundlach, who famously predicted Trump’s victory in 2016, says the president will secure another term. David Rosenberg acknowledged that possibility, but is not so sure of the outcome. Both offered their predictions for the post-election economy and markets.

I present data and observations highlighting how dividends can protect investors from inflation and market volatility. While this is relevant to other applications, I focus on retirement income.

Americans with money discovered in the Depression of 1837-1842 how large the spread could become between the cash in their pockets and the values of their bank accounts and property.

Clients are surprised when I request copies of their tax returns. But when they see the process I use to save them money – tax “alpha” – they often wish April 15 came more often.

Want to hear something really scary? Inflation, the scourge of the modern economy, may be running much faster than we’re led to believe.

Our Head of Equities, Stephen Dover, and Western Asset’s CIO, Ken Leech, believe global stimulus and the likely longer availability of zero or negative interest rates will support the path to growth in 2021. And China will continue its growth path to becoming a bigger part of the global financial community.

Bill Bengen’s research calculated how much a retiree can take out safely from a generic portfolio over 30 years without running out of money. Wouldn’t it be nice if you could take a prospective client’s asset allocation and calculate the percent of time periods since 1926 that it would have survived a 30-year retirement?

Stocks tumbled again on Wednesday, as worries about rising COVID-19 cases and hospitalizations sent investors toward the safe havens of U.S. Treasuries and the dollar.

Conventional wisdom says urban residents will flee cities in droves in response to higher taxes and the COVID-19 pandemic. But will that really come to pass?

Most companies’ earnings—and creditworthiness—took a hit from pandemic containment measures like lockdowns. But with initial credit market adjustments to COVID-19 behind us, what challenges are still evolving and where does Vanguard’s fixed income team see opportunities?

The ongoing COVID-19 pandemic has led to the closure or partial closure of many on-campus dormitories and privately run, offsite facilities. Against this backdrop of weakening demand and uncertainty around when college life may return to normalcy, our municipal bond team’s Vander Shanholt gives his take on the long-term challenges for student housing projects.

The relative calm we feel in the markets right now isn’t the end of the storm, it is just the eye.

Enjoy Harold Evensky's latest Newsletter.

2020 has proven a challenging year for numerous businesses and individuals, Grey Owl Capital Management included. While most domestic stock market indices have fully recovered from the February and March Covid sell-off, many of our accounts are still down slightly on a year-to-date basis through the end of September.

With the economy slowing in September, the battle for a quick rebound may be far from over.

The tightrope walker has his blindfold off, the wind is blowing, and it’s a long way down. Technically speaking, high-yield bond prices broke downward through a “double bottom,” which could reasonably be taken as an indicator of coming trouble for the stock market as well, given the greater wariness among bond market investors this year.

The primary goal of this article is to explain what makes dividends different. Dividends provide investors with a growing stream of income that is largely independent of market volatility. On balance, dividends are a powerful financial planning tool many retirement models seem to neglect.

Corporate bonds are riskier than Treasury securities. The reward for accepting this risk is larger when spreads widen, but may be less than investors expect when spreads are modest.

My 2007 book, Wise Investing Made Simple: Larry Swedroe’s Tales to Enrich Your Future, contained 27 tales to educate investors about important investment concepts and strategies. This article is in the spirit of those tales.

The coronavirus has compressed years of changes into months. It may be the straw that broke an aging, overconfident camel’s back.

Here at U.S. Global Investors, we’re very bullish on commodities, particularly industrial and precious metals.

Every once in a while, a breaking news story is on a topic that I actually understand. The September 27 New York Times article about Trump’s taxes was one such story. Many reactions to it show considerable misunderstanding and confusion on how the tax system works.

The coronavirus pandemic has created many challenges for individuals, businesses and governments around the world. In Europe, there’s a new vehicle to help finance the economic recovery there—social bonds. David Zahn, our Head of European Fixed Income, discusses this exciting new bond issuance, earmarked for funding employment initiatives.