Municipal Bond Market Update

The municipal bond market has seemed like a roller coaster ride for investors in recent years. However, it is important to separate perception from reality.  Over the past ten years, municipal bonds have generated tax-adjusted returns in line or better than comparably rated fixed income products and US equities, with significant lower volatility.

The gap between perception and reality created in 2013 represents an opportunity for long-term investors with a focus on after tax income.  While valuations are attractive, the marker is not without risk.  At times, the fragmented nature of the municipal market, along with a high degree of retail ownership, results in reduced liquidity and increased volatility.  A professional municipal bond manager with the resources to construct and monitor a well-diversified portfolio can help you navigate the increasingly complex, but potentially rewarding municipal bond market.  Rather than watching the market from the sidelines and trying to time the perfect moment to redeploy capital, we believe investors may want to consider getting invested now, while they can take advantage of current attractive valuations relative to other fixed income asset classes.

Source:  Invesco Investment Insights

******

The D2 Capital Management Tax Free Income Portfolio is currently yielding 4.77% (Trailing 12 month Tax Equivalent Yield at 28% Tax Bracket, as of 15 September 2014).  Year to date the portfolio is up 7.74%

The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.