Thursday, May 21, 2009

Municipal Bond Strength: A Bit of Risk Appetite Among Investors


Here's a two-year chart of daily closes for the Vanguard Intermediate-term municipal bond fund (VWITX). Note how we've recovered from the large losses late in 2008 and now are back up to the prior price highs. In a low interest rate environment, those tax-free yields have looked attractive to retail investors and, amidst hopes of economic stabilization, investors have been willing to move away from Treasuries and into munis.
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2 comments:

Matthew C. said...

Wonder how long that will last as California and its municipalities slide into bankruptcy. . .

TSMoulton said...

Dr. Brett,

Hi, Have you used or even heard of Google Trends? It looks to be a very interesting way of gauging market sentiment. The search engine searches for the activity of searh terms then graphs it for you. Check out this link that shows the results for Investing, and "Buy Stocks" http://google.com/trends?q=investing,+buy+stocks&ctab=0&geo=all&date=all&sort=0 Very Very Interesting...