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Munis a Safe Bet?

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  • Description

    Brookstone Capital Management CEO Dean Zayed explains why he is bullish on muni bonds.

  • Duration 2:23
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Well fiscal -- survival get.

Looking for a safe investment Muni bonds may be the way to go so says -- I had Chief Executive Officer -- Brookstone capital management.

He joins us now offered from Chicago thanks for being with us.

Dean so you like these Munis even -- a year ago we -- terrified of going to be all kinds of defaults across the landscape.

You know Dennis is one of my favorite topics actually because we have Brookstone capital management have been very bullish -- -- since the 2008 crisis frankly.

It's produced some stellar.

Total returns for our clients would include both the interest on tax free basis and the appreciation.

Would you prefer that I as your client by an entire bond -- or -- -- to buy a basket have been some kind of ETF for something.

What without a doubt the opportunity that we've seen -- through actively managed mutual funds.

What happened in 2008 was it was indiscriminate selling across the entire Muni sector.

It created a real -- pricing in many of the bonds frankly.

And a lot of these active managers were able to really take advantage of that frankly -- in terms of diversification and getting access to literally thousands of bonds out there.

Much better playing on the Munis to go through actively managed funds and trying to pick individual bonds for your portfolio.

Actively managed funds okay I'm back -- you probably run one of those -- to get good fees on -- to -- -- talk here but care but that that's totally fine and and when I do this though I'm gonna buy a bond.

Is it better in my buying it to hold onto it until maturity or -- buying its I can flip that baby and sell it when it goes up in price.

Well you know what with funds as you know you don't there's no maturity and the fund your buying a basket of of of bonds.

Are actively managed -- for the most part it's been a -- tactical income play.

To take advantage -- -- we saw was a missed pricing in the sector.

Really what's happened is yields were north of five or 6%.

And even some of the high yield Munis.

Those yields have come down it's been a reversion to the mean type play.

As as the pricing of those bonds got more in line with what they -- -- been priced at.

More closer to par value frankly so as your -- that come down -- pricing -- your funds have gone higher.

That created a perfect storm of total return that included a high amount of current interest tax -- okay as well as an appreciation.

All right thank you very much for got to wrap but you also like bonds especially there's -- hospital's -- -- go.

And tall -- thank you for being with this -- -- -- -- we continue.

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