“I tell all my high-net-worth clients they should only consider municipal bonds,” Cohen said in the article.
Moreover, a strengthening economy could also support the munis market, or at least diminish perceived credit risk.
“Growth and falling unemployment brings in more revenue for states, and rising home prices is good news for local issuers who are more dependent on property tax revenue,” J.R. Rieger, global head of fixed income at S&P Dow Jones Indices, said in the article.
Demand is also supporting the munis market. According to Morningstar data, retail investors funneled $32 billion into municipal bond funds and ETFs in 2014, with almost $11 billion coming in during the fourth quarter.
For more information on the munis market, visit our municipal bonds category.
Max Chen contributed to this article.