Muni Bonds Continue to Outperform - I Was Right!!

Last year on 12/23 the world reacted to an extremely, uneducated call on the municipal bond market by pundit Meredith Whitney. She claimed there would be mass destruction in the muni bond market.... I was one of the first to come out and refute her ridiculous assumptions.

The NY Post, NY Times, Fox Biz, etc. all called me to get my insights and basically they thought I was crazy because Whitney was a known commodity after her call that the banking system had issues in 2007. I will give her credit where credit is due. She was spot-on on that call, but when it comes to munis she was simply trying to pump her new business.

Take a look at this paragraph from a story on www.bloomberg.com today:

Refuting Whitney’s forecast, which helped send borrowing costs to two-year highs in January, the $3.7 trillion municipal- bond market rebounded this year, generating an average total return of 10 percent through Dec. 12, better than U.S. Treasuries and corporate bonds, Bank of America Merrill Lynch indexes show. Munis also trounced equities as the Standard & Poor’s 500 Index lost (SPX) 0.6 percent in the same period.

YEP!! I was right!! But not only was I right - I own quite a bit of the iShares Muni Bond ETF ($MUB) and the Market Vectors Muni High Yield ETF ($HYD).

And yes, both ETFs are beating the S&P 500 since Whitney's fateful call on the muni bond market.