Recent losses have caused serious pain to muni investors’ bottom line. Can they overcome the pain? The answer may be yes, and probably pretty quickly. If history is any guide, municipals seem built for recovery. Not only that, but investors who are thinking of this as a buying opportunity may be on to something. Consider this: for five-year AAA municipals, the market is currently pricing in a top tax rate of 25%, and Trump proposed a tax rate of 33%.
The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.