Duration: 2:52
Transcript:
So there’s an old saying out there, no one has a crystal ball. Right? Your plan is still your plan. If you’re one of our clients, whether whether you do business with us or not, you’re watching this and you’re looking at this going, okay. What exactly should I do? What should I expect?
And, really, what’s the game plan?
It all goes back to no one has a crystal ball. We can’t tell you that yields are gonna go down. We can’t tell you really yields are gonna go up. I can what I can tell you factually is that yields have gone up significantly unprecedented in the last three days.
Will they continue to move up? I I I really can’t tell you that, but what I, again, can tell you is is that you were buying four percent last week. This week, you can buy four and a half to five percent. So what does that tell you?
If you like four percent last week, then you’re gonna love five percent this week. And then they go to six percent. In my three decades of doing this, five percent is always, and I keep coming back to this, the magic number. It’s always the magic number because people go, you telling me I can get five percent on a tax exempt?
High grade, double a rated, probably insured, not subject to AMT, I’ll take those. So we’re seeing that kind of buyer come into the marketplace. Can’t tell you if it’s gonna go to five fifty. Can’t tell you if it’s gonna go to four fifty.
But at the end of the day, if you’re comfortable at five percent for the long haul and say, okay. Fine. I can live off of that, and that’s what I’m looking for, then now is your time. At what’s really gonna happen from a crystal ball standpoint?
Look. Trump came out with those tariffs and immediately he reversed it because the bond market went down in price up in yield significantly.
So they recognize, they meaning the administration, the Fed, everybody recognizes that the bond market is really the controlling factor on this stuff. Think about it from a treasury standpoint. If treasuries go up to five percent on the ten year, what does that do to borrowing costs to, say, the United States? What does that really do?
Just look at it from a logical point of view and say, okay. The government is not gonna want treasuries to move up significantly in, yield down in value because of the fact of the borrowing cost. And I’m not gonna go into the whole deficit or anything like that, but from a logical point of view, again, five percent on munis is the magic number, and that’s about where we are right now. If you have questions, if you need answers, if you’re looking for guidance, if you’re really looking for somebody that’s been in this business for a long time, three decades, and have traded through this before, whether it be nine eleven, o eight, Meredith Whitney, Detroit bankruptcy, Puerto Rico, you name it, we’ve traded through it.
COVID, of course, we can help you with that. So where do you go from now? Sit tight. I would keep your keep your cool.
Look for opportunistic purchases. Five percent is the magic number. We’re about there now. Take a look at what you’ve got.
Take stock of your cash, leg into the market, and we look forward to talking to you.
