What We Do
Help Americans earn more Tax-Free Income through Active Management
Interest Rates have been artificially held low by the Federal Reserve since the 2008 Financial Crisis depriving savers and investors an adequate yield on their savings. Interest rates on money markets, Certificates of Deposit & US Treasuries have been insufficient for conservative investors. The municipal bond market remains the last bastion of tax-exempt income for the American Citizen.

Through our expertise, relationships, and patience, we laboriously scour the $4 Trillion Municipal Bond Market to locate bonds at the right price. First, we determine what the bond is worth and what we are willing to pay. This is not simple because of the complexities and variations of bond structures, such as purpose, maturity, coupon, state, call provisions, and other specific items in the indenture. The key to our shared success is patience. Anybody can pay a high price and get a mundane yield. Please read about “Our Process” for further detail

Our goal is to deliver 15-20% more income net of our fee to the client through our process-driven Municipal Bond Advantage Strategy. Through our process of identifying mispriced, misunderstood bonds and other inherent inefficiencies in the municipal bond marketplace, our conservative investors not only sleep at night, but they enjoy the satisfaction of earning more tax-free income.
Better Bond Ladder
Many investors tell us they own a Bond Ladder which is a very intuitive and visual concept. The problem for investors over the past 12 years is the low-interest rates especially in the short portion of the interest rate curve. Why hold up large portions of your capital in the 1-5 year maturity of the curve earning next to nothing?

In addition, many investors tell us their Financial Advisor structured a bond ladder for them in a tone like the FA shared the process of splitting the atom. Well, how convenient and simple for the Financial Advisor; we would not want him/her/birthing person to think or work too hard. Once a year, he/she/birthing person has to find a bond on the upper rung of the ladder to reinvest the proceeds of the maturing bond.

With our active management, we will look to sell your bond when it has 2-3 years left until a call or maturity. Anybody can let a bond mature; it’s easy and requires no work until it is time to reinvest. On the other hand, we will offer your bond at a high retail price on an electronic platform where thousands of potential buyers will see it. If no one lifts our offering on your bonds, we will take down the offer and then put the bond out to bid. There may be someone out there crazy enough to pay retail for your bonds. Both offering a bond and putting bonds out for a bid are structurally impossible at a brokerage firm. When we succeed in selling your bond at a retail price, we will then go back out to reinvest your bond proceeds at wholesale pricing in the sweeter part of the curve.

The result of selling to the client can be an extra point or two on the sale of the bond. 2 points on $1,000,000 is an additional $20,000 of capital to be deployed or reinvested into the sweeter part of the curve. Plus, do not forget the additional yield achieved. In December 2020, partner Jeff Watkinson examined the disruptive business model of Carvana and of Watkinson Capital.

This Unique Asset Class
Please educate yourself about this asset class. The Municipal Securities Rulemaking Board is a self-regulating organization subject to oversight by the Securities and Exchange Commission (SEC). Their mission is to regulate the municipal market to support a fair and efficient municipal market. Their website contains a terrific Education Center. Definitively ask us about whatever topics interest you on the website below.