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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
|
2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
|
848.03 |
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S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
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S&P U.S. Preferred Stock Index (TR)
|
1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
|---|
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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There’s No Such Thing as a Muni Expert |
CNBC - Feb. 22, 2011 - By John Carney
The strongest case for investing in municipal bonds turns on claims of expertise. Unfortunately, there’s little reason to be confident in these claims and strong reasons to be skeptical.
Marketers of bond funds like to promise that their “proprietary portfolio management system and the portfolio manager’s 20-plus years of experience” will give investors an edge, despite the recent rise in risk for muni bonds.
Unfortunately, these claims are undermined by the historical strength of the muni market. No one has lived through a muni market like the one we have entered, which means that “20-plus years of experience” may be largely irrelevant.
The fact that there may be more uncertainty in the market than ever before may seem obvious. But few people understand its implications.
Wells Fargo, for instance, seems perfectly happy to rely on historical data that show very few defaults in the past. Here’s what the San Francisco based bank told clients in a note titled “Keeping Municipal Default Risk In Perspective:”
We do not expect a significant increase in municipal defaults for many of the reasons mentioned in this paper. As municipalities weather this period of fiscal stress, an increase in headline risk and ratings downgrades is quite likely, which potentially increases the risk to investors holding individual bonds.
However, the elevation in headline risk does not mean that diversified municipal bond investors are taking on inordinate amounts of risk. As shown, actual defaults in municipal bonds are exceedingly low compared with corporate bonds, and their recovery values are typically much higher, particularly in general obligations issued by cities, counties, and states.
This is reliance on past performance to predict future results.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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