Patience, Discipline, and Rough Waters: Navigating the Muni Market Ahead

An abbreviated recap following Friday's global bond carnage:

• Munis will get very cheap over the next two weeks, it is a great time to think about an addition
• Too much supply: price and structure discovery opportunities will be abundant
• Memorial Day
• Global fixed pressure (UK/Japan in particular)
• Poor liquidity conditions (expect fund/etf outflows)
• Negative convexity pressures to raise yields
• CA muni prices have come back to earth too: all will equal yields well north of 3% short (UST equiv 5%+) and 4.5-5% tax free 20yrs (UST equiv 7.5-8%+), good buys to be had pre-summer!

Municipals may have rough waters ahead, but our experience at @Riverbend has enabled us to actively prepare for this:
• Positioned with defensive durations and structures
• Excited to add value (higher tax free income) and capitalize on the total return opportunities of an increased rate environment

Are you comfortable with your current muni allocation?

It's time to keep working with patience and discipline.. and with experts who know how to catch the perfect wave.