This week (May 13, 2011 – May 20, 2011) saw more of news about the US government’s deficit battles. Tax-free Mutual funds saw outflows finally end. The Muni Market has slowly moved back up, perhaps because of a lack of supply. This may be a good time to adjust your asset allocation. The Week’s municipal bond news included:
- As we mentioned a couple weeks ago, some states with underfunded unemployment benefit programs are desperate enough to issue new municipal bonds to refinance their debts. They would rather not charge struggling businesses additional money. Double-edged sword!
- More comments on the municipal bond recovery, with news that individuals have been gobbling up issues of late. As we have mentioned in our tutorials, you will not get the best pricing on municipal bonds by purchasing them online. (Barron’s)
- 5 reasons to rethink the Muni rally. A good article that reminds us that municipal bonds have rallied back, but still have the same risks attached to them. The rally follows one in treasury bonds and an oversold condition early this year. (WSJ.com)