As municipal bond investors, we sometimes get so caught up in where interest rates are headed or if the yield curve is flattening or rising, we lose track of the most important aspect of municipals bonds: how the projects they finance help the community.
At their best, bonds fund projects deliver essential public services to the community. The benefits can be both immediate and last long into the future. Schools get built, highways paved, water and sewer systems expanded, bridges and tunnels maintained, hospitals upgraded,and a host of other projects created or improved. Few other investment vehicles so positively affect our lives in such tangible ways. It’s the reason municipal bonds are generally a credit-stable asset class.
While that’s an important point for investors to keep in mind, it sometimes leaves the impression that municipal bonds are, well, a little dull.
by Barnet Sherman
July 9, 2019