It’s probably time to worry about inflation for real. But as someone who’s run two bond desks (Thornburg and Vanguard) through thick and thin, and currently manages muni and other fixed income SMA strategies for City Different Investments, I don’t think it’s time for investors to abandon fixed income.

If you invest in municipal bond mutual funds, some odd quirks about the way mutual funds work could have a big impact on your risk.

Municipal bond investors are spending a lot of time talking about taxes. They worry the Manchin and Sanders wings in Congress will finally reach a compromise on the infrastructure and reconciliation bills, sending taxes higher. Others still hope tight majorities and an even tighter legislative calendar will scuttle the whole program.

Based on historical measures, tax exempt municipal bonds are rich to just about every other fixed income asset class! The three examples below illustrate how tax exempt municipal bond yields compare to taxable alternatives. Proof: (All Data as of 4/23/2021)

Preparing your Fixed Income Portfolio for Inflation Should investors worry about inflation? We believe so. Does that mean investors should abandon the fixed income markets? No. A balanced portfolio made up of stocks and bonds has proven to be beneficial to investors over time. How should an investor manage their fixed income portfolio? Don’t panic. We...