What now, then? Though a recent Wall Street Journal article noted that the situation in munis may not be as bad as some are saying, particularly because of the action some states are now taking to get their budgets balanced and under control.
But that doesn’t change the fact that munis have been slammed lately, driving most muni bond ETFs well below their long-term trend lines. If you’re using a trend following strategy, now might be a good time to consider your exit strategy until this situation resolves itself.
For more information on the munis market, visit our municipal bonds category.
Max Chen contributed to this article.