Outsourcing your Financial Decisions?
We are encouraged to outsource our financial decisions to “experts.” If we give control of our assets to others, relying on others to manage our financial affairs, then we might set ourselves up for failure. One managed account organization poses these three questions: These questions are posed to you so that you will feel the […]
How Market Sentiment Influences Investing in Bonds
What is market sentiment worth? Market sentiment is captured in the expression “term premium.” Term premium is the compensation that investors require to bear the risk that interest rates may change over the life of the bond. There are two factors that drive market sentiment, among others: United States debt levels and fear of inflation. […]
High Yields On High-Quality Tax-Exempt Municipal Bonds
The Federal Open Market Committee (FOMC) left the federal funds target range unchanged at 4.25% to 4.50% on Wednesday, January 29, 2025. This breaks the pattern of three rate cuts on 2024. There is strong growth and a resilient labor market. Inflation has not reached its lower target, but has also not elevated much. There […]
Should I Accept a Tender Offer to Sell My Municipal Bonds?
In 2018, Congress took away municipal bond issuers right to advance refund bonds. Municipal issuers used to “pre-refund” bonds to their nearest call date. The bond holder then knew that their bonds would be called on the call date and not the maturity date of the bonds. Some issuers have been turning to tender offers […]
How Can I Protect Myself Against Inflation?
This is an oversimplified case study to introduce you to an investment that you have all heard of, but may not understand because of its complexity – and it is very complex. The investment problem is INFLATION. One investment that is designed to protect against inflation has the nickname of TIPS. The formal name is […]
Why is This the Right Time to Buy Bonds?
“Bonds are paying the highest yields in a generation, and interest rates are poised to come down.”[i] This is a compelling time to purchase bonds. Are you waiting for a rate cut? How will this affect your financial holdings? The answers depend initially upon your objectives and your financial situation. It is tempting to keep cash invested […]
Top 10 Key Concepts to Consider in a Tax-Exempt Muni Bond Purchase
What is a muni bond? It is a bond that is issued by a state or local government, or an agency of that government to raise money referred to as “capital”. When interest rates rise, the price of the bonds fall. When the interest rate falls, the price of the bonds rise. This is called an […]
How to Evaluate a Municipal Bond
We recently received a call from a client. He asked us how we would evaluate a municipal bond that was offered to him by a broker. Here are some thoughts. All bonds share a defined structure. What differentiates one from another is the quality and quantity of each of the ten parts of a bond […]
A Short Commentary: The Current Risks of Stocks and Bonds
by Hildy & Stan Richelson This will not be a learned article dealing with the evaluation of the risks in the stock and bond market. This will be a snap shot of some of our reflections as we think about a few aspects of what we see in the news today. Are Stocks Riskier Than […]
The Return of the All-Bond Portfolio
When we started out as new investors, we were advised by the media, investment books and all investment professionals of two ideas: Diversify your investments to maximize returns; and Stocks will always outperform bonds. This article makes the case that “it ain’t necessarily so” particularly at all times and in all markets. Come […]