Buying Premium Municipal Bonds at a Discount

Everybody likes a bargain. One such bargain today lies in municipal bond closed-end funds. Although they are not as attractive as they have been at in other points in time, municipal bond closed-end funds currently have an average discount to net asset value of around six percent. This means that investors can purchase $1.00 worth [...]

Why Bonds Should Be in Your Investment Portfolio

The US stock market has made tremendous gains since the 2009.  Since March 31st, 2009 to September 30th 2018, the S&P 500 Index is up an annualized rate of 17.03%.  Stock investors have benefited greatly and they have seen the results in their retirement plans and personal investment accounts.   A number of factors have led [...]

A Good Time to Invest in Muni Closed-End Funds

Taking advantage of a deal is something that everybody wants to do. It is why individuals wake up at four in the morning on Black Friday to fight crowds and stand in line for hours. It is also the reason shoppers spend the time to clip coupons. In essence, shoppers are willing to seek these [...]

Interest Rates and Future Bond Returns

The Federal Reserve has been increasing short-term interest rates (i.e., the Fed Funds Rate) for about two years, raising the target rate from 0.25% to 2.00% today. In comparison, longer-term interest rates are controlled by supply and demand in the marketplace. Looking at two commonly used bonds, the 10-year U.S. Treasury and 30-year U.S. Treasury, [...]

Welcome Back Higher Bond Yields

From their recent low of 2% in September 2017 to present, the yield on the 10-year Treasury bond has risen approximately 0.8%.  This is a fairly big move in a short period of time. As bond investors know, rising rates are synonymous with falling prices.  Thus, bond investors must endure some short-term pain to achieve [...]

Thoughts on 2018’s Bond Market

Over 80% of forecasts for 2017 were for interest rates to rise. Most were recommending shorter maturities. Our work, based on historical data, suggested that 2017 would be a good year for bonds (and perhaps a great year). Our analysis concluded that when you have carnage in the bond market caused by a rapid rise [...]