Bond yields are higher as the market is concerned that inflation will linger longer than anticipated. The 10-year Treasury reached the high of 4.59% today, as I write. Bond yields have stayed below 4.70% since April 25th, reaching the low of 3.62% on September 16th.
While some may interpret these market fluctuations as disheartening, it’s important to view them as buying opportunities. For bond buyers, the recent increase in yields represents an almost 100-basis point gift. While the future direction of rates is uncertain, the potential for better returns currently exists for those desiring more yield.
Furthermore, as investors craft their 2025 investment strategy, it’s crucial to consider the role of municipal bonds. The aggressive nature of the taxable equivalent on these bonds, when compared to the stock market and other similar-quality assets, should instill confidence in their potential for strong returns.
When investing, it is important to remember, it’s not what you earn, it’s what you keep that matters. With that thought in mind, consider tax-free municipal bonds in your portfolio mix.
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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
