What’s Going on in Bond Land?

by Marilou Long on March 3, 2009

in Bonds

Our fixed income strategy is pretty simple; we ladder high quality, intermediate bonds.

For taxable investors, we primarily use tax free municipal bonds, but we will also look at corporates, CDs, treasuries, and agencies based on relative value.

With rates so low right now combined with the flight to quality in treasuries and munis, we are finding value in higher quality, short corporate bonds. The term credit spread refers to the yield premium that the investor is receiving versus what he would get in a comparable maturity treasury note. While spreads are off their highs set during the worst part of the credit crisis, they are still very high historically. The high spread indicates that market participants are concerned about the possibility of default. We are being very selective in our purchases

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