Finding new municipal bonds to invest in should not be difficult as 2017 gets underway. With tens of thousands of new issues every year and rising rates, the outlook for the 2017 municipal bond market looks very strong indeed.
At the same time, there is still a significant degree of uncertainty built into the municipal bond market as 2017 gets underway. A great deal of that uncertainty involves fiscal policy and its political implications, and only time will tell where it all shakes out. The first few weeks of the President Trump administration have been uneven, to say the least, so it is still unclear how much of the Trump agenda, including future changes in tax policy, will make their way through Congress and land on the President's desk.
Uncertainty over future tax rates and modifications in fiscal policy could continue to provide strong headwinds for the bond market in general, and the municipal bond market in particular, going forward. That does not mean that municipal bond investments will not continue to be very attractive - for high earners, municipal bonds are one of the best deals in the financial market.
What the uncertainty does mean is that professional help and guidance is likely to be more important than ever. As 2017 gets underway, the value of that advice cannot be overlooked. Passive investment may work well in the stock market, and it is true that the vast majority of mutual fund managers fail to beat, or even meet, their respective indexes. But it is also true that passive investing does not work nearly so well in the fixed-income arena.
When it comes to municipal bond investing in 2017 and beyond, choosing the right sectors, and the right individual municipal bonds will be critical. An experienced financial advisor or wealth manager can help their clients navigate the tricky waters of the municipal bond arena and develop a portfolio that makes the most sense given their individual circumstances and investment objectives.
If you have clients who currently invest in municipal bonds, chances are they will want to continue those investments in 2017 and beyond. 2016 was an excellent year for municipal bonds, and 2017 promises to be just as strong, at least for investors who choose the right sectors and get the professional help land guidance they need.
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