Quarterly Review: Income Matters More

Nick Venditti: I spent the weekend in Door County, Wisconsin, with my family. For those of you who don't know, Door County is sort of the Wisconsin equivalent of Nantucket in the northeast. It's beautiful. As we walked around near the water, we saw all of these marinas with gigantic boats, and I couldn't help but think to myself, I wish I could have gigantic boat money. But as I went to sleep that night, it occurred to me that one thing I'd rather have than gigantic boat money is enough money to send my kids to college; make sure they have enough food to eat; and, God willing, allow me to retire someday. And as I thought about those more attainable goals—those more real-life, real-world goals—it occurred to me that there's a much better way to go about that. And that's income. Look, I know the markets have been volatile the last couple of weeks. It has felt painful, but fixed income is throwing off incredibly attractive yields in this environment. That's doubly true for municipal bonds. I know it's a volatile world. I know investors are concerned about Treasury rates. I know they're concerned about credit. I know they are concerned about geopolitical realities. If you are looking at allocating assets today, I believe you should strongly consider municipal bonds. Municipal fixed income offers you some of the protection from the volatility of geopolitical events. They provide lower correlation to asset classes beyond just fixed income. And, most importantly, in today's market, they are generating high yields—income levels that will allow you to achieve those much more attainable and, frankly, more important life and investment goals.