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-- on market in focus as it -- -- to get heat here.
More and more investors are getting worried about states' abilities to pay their -- we've been watching these protests for a week now in Madison Wisconsin now.
According to Lipper for the week ending February 23 investors pulled some 610 million dollars out of Muni bond funds.
Marking the fifteenth straight week of outflows but our next guest says don't -- the news out -- scaring you this may be the best time to get into the Muni market.
-- -- -- chief investment officer -- -- partners.
I -- great -- and didn't tell us why is this -- time to buy -- Well we've we think it is probably a classic case.
Investors getting overly worried about certain types of bonds that have risk.
And there are other types of bonds -- just don't have those risks.
Interest rates on all of them have risen to levels.
That far exceed their taxable equivalent so we are buying bonds.
As fast as we can find the quality ones that we want.
So explaining why -- don't have to worry.
In certain situations the worst case -- if a municipality default -- nine government bond which I believe what -- referring to defaults.
Are you in good -- we have editor.
-- if you buy the right kind of -- we certainly think you are there are two types of municipal bonds.
Are our tax free bonds and there are tax free bonds.
There were sold for the genuine use of -- municipal government to build something you think that a government typically builds a library.
A water treatment plant the highway.
Other types of tax free bonds are sold by hospitals universities and other nonprofit groups.
Those are the types of bonds that we think will will come under stress under any kind of economic downturn.
On the municipal side the true municipal side.
If you buy bonds where there's a dedicated stream of revenue to repay the bonds.
You're not taking the political -- that a City Council or school board will decide they're not -- so dedicated stream of revenue how do you check your sources of repayment.
-- EU you have to choose carefully you can find the information at the MSRB the municipal securities rule making board.
Has a web -- NS RB dot ORG.
Go there and you can research the bonds if you're dealing with a broker asks those questions we prefer bonds that have the words general obligation in that title.
We prefer bonds that are backed by water systems wastewater systems electric utilities.
Again we're dedicated revenue streams that aren't going to be carved up among other creditors if the municipality gets in trouble.
And what about maturity is so much attention these days focused on.
The concern -- the threat of inflation so you probably don't wanna go too far out the curve here using treasuries as a benchmark.
Yeah that we we do worry we think the Fed will eventually get what it wants and what the Fed wants his low single digit inflation sustain for a long long time.
So if you're buying ten year treasuries at three and a half percent.
And inflation averages three and a half percent.
You end up in negative territory after taxes so that we we do think you need to keep your maturity short.
We tend we we prefer to stay inside of ten years for private investors.
We don't really want you to get tempted to go out by 20/20 five and thirty year bonds because you're tempted by the yield chances are you're gonna get hurt if you do that.
All right -- ash -- On opportunities and -- bonds these days thanks -- time.
A live look for you at a shot.
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