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Avoiding the Next Blowup in Municipal Bonds

municipal bond funds

A recent wealth management oriented article reminds us that there has been a recent turn up in municipal bonds after excruciating losses at the end of 2010 and at the beginning of 2011. Volatility is way down, but very few new bonds have been issued. Now is a good time to examine your portfolio before the next possible blowup. Do you have your fixed asset allocation correct? Is there too much in municipal bonds?

“This is a good opportunity to lighten up,” says bond expert Jeffrey Gundlach of Double Line Capital.

If you’re looking to take advantage of the municipal bond market, pre-refunded municipal bonds are recommended by Marilyn Cohen. Only ones that are backed by US treasuries of course.

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