What should you do now? Don’t panic.

Presented by: David Loesch
Registered Representative Principal/ OSJ

Duration: 2:21

Recorded: April 11, 2025

Transcript:

What do we do now? Where do we go from here?

You know, our advice is that we’re buying municipal bonds for income, we’re buying them for safety, and we’re buying them to mature or get called. Eventually, all of that will happen. Income, of course, will always stay steady. We’re not buying credit risk, so you don’t have credit risk from the standpoint of the income going away from a, let’s say, an underlying problem.

We’ve got the call. We’ve got the maturity date. So you know at one point in time, you’re gonna receive your par value back, whatever that par value is. In the meantime, enjoy the coupon. Enjoy the tax exempt income. That’s what they’re designed to do.

Yes. They’re down. Not gonna dispute that. Everything is down. Whether it’s municipal bonds, corporate bonds, equities, whatever.

Everything. Gold, oil, everything is down. But the fact of the matter is that you’re gonna continue to clip a coupon. You’re gonna continue to get those dividends.

You can utilize those dividends either for living expenses, like some of our clients do, or buy more bonds, which most of our clients do. So you can choose that from that standpoint and say, okay. Look. Yep.

My portfolio is down. Yes. I bought bonds at four percent, three and a half percent, four and a quarter percent, and now they’re trading fifty, sixty, seventy five basis points higher. Remember, higher basis points, lower dollar price.

So now they’re trading higher in yield. Well, we love them at four percent. Nothing’s changed from an underlying credit quality. We love them at four and a half.

We love them at four sixty five because of the fact that we’re legging in, averaging down in the marketplace, and, eventually, this will turn. So municipal bonds historically have always turned. By the way, they always lag treasuries, which effectively means that if treasury market is up in price, yields on, prices on munis probably will lag two to five days after treasuries, and that’s exactly what we’re seeing now. So stay the course, remember what you purchased, remember what you’re doing, and enjoy the tax exempt income, stick with high quality, and you will reap the benefits.

And then if you’ve got cash and if you’re looking to purchase securities, now might be a good time to do it. Give us a call. We’ll talk about it, and we’ll review the options.