Ronald P. Bernardi was quoted in the 12/3/13 issue of InvestmentNews regarding the long-term implications of the Detroit bankruptcy:

“We look at this kind of market and know that higher yields translate to better income down the road,” said Ronald Bernardi, a muni bond trader and president of Bernardi Securities Inc. “From our perspective, 27 weeks of outflows isn’t necessarily all bad.”

He elaborated that some of the municipal bond fund outflows represent “hot money” from investors not truly in the market for traditional municipal bond benefits:

“I have felt for many months that a lot of the money that had moved into muni funds was hot money,” he said. “It was investment capital that would have been in money market funds or CDs, but in the early part of the year, it went to muni funds and was never consistent with the risk profile of many of those investors.”

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