Fixed income of all kinds has fallen off a cliff since the Fed’s announcement of quantitative easing on November 3, and the 60 Minutes interview with Meredith Whitney last week has given municipal bonds an added push.
Warning on the popular CBS news program about what she called “the largest threat to the U.S. economy” since the housing real estate market collapse, the bank analyst—who correctly forecast the ruination of banks resulting from soured real estate loans—may have overstated her case, according to some critics.
As spooked retail investors unload their muni bonds, we turned to Morningstar’s Director of ETF Research Scott Burns (left) for the non-catastrophic view on investing in munis, and advice for those who might actually want to buy munis.
Burns is not bullish on munis. “My personal prediction is we’re in for a bumpy ride,” he makes clear, but also argues that “the ferocity of the selloff in light of no actual news was a mismatch."