Please check out this link “Muni Facts” from
the MSRB (Municipal Securities Rulemaking Board) and let me know your questions/observations.
I enjoyed highlighting the relative safety
of this asset class evidenced by the historical defaults rates for investment
grade MuniBonds at 0.09% vs 2.23% for investment grade corporate bonds.
Secondly, it is important to note how over
2/3 of municipal bonds are held by individual investors. This $4 trillion
MuniBond marketplace remains unique compared to other asset classes because
nearly 70% of municipal bonds are held by individuals not institutional
investors. The result is more pricing dislocations presenting themselves in these
50 states with 50 different marketplaces in the MuniBond ecosystem.
Finally, individual investors aka mom & pop unfortunately make poor decisions when investing in municipal bonds. They tend to buy high (low yield) and shun municipal bonds when prices decline and yields increase.
Studies have shown that MuniBond investors tend to be more skittish and irrational than equity investors. Our clients have and will continue to capitalize off irrational selling.
Contact jeff@watkinsoncap.com to hear more on our observations on Muni Facts by MSRB.
#MuniBonds #Munis #MunicipalBonds #WatkinsonMuniBonds #GetRealStayRich