As we look out over the last quarter of 2024 and into 2025, what we know with certainty is that the direction of financial markets, the broader economy, and the geopolitical landscape will remain highly uncertain.

When the Fed begins to cut interest rates, next month, as markets now expect, it will likely be the first of a series of cuts, rather an isolated event.

Municipal credit quality remains stable, and the muni curve remains steep providing an attractive opportunity to extend duration and pick up yield by increasing weightings to lower investment grade and below investment grade munis.

Clinton Investment Management, CEO and founder Andrew Clinton joined the RIA Channel’s Keith Black to discuss tax efficiency in an election year. Andrew shares CIM’s outlook on interest rates and munis, amid elevated market uncertainty providing insight on the current absolute yield environment as well as the unique value proposition CIM seeks to deliver to its clients going forward.

The reinvestment rate risk and opportunity cost associated with cash and cash equivalent investments, can be extremely high if one is sub-optimally positioned.

In November fixed income markets and municipal bonds in particular experienced the best monthly return since 1982. Clinton Investment Management’s Market Duration and Municipal Credit Opportunities strategies enjoyed their best monthly performance in our firm’s history. Positive bond market momentum has carried into December as well.

Fixed income investors able to take advantage of the opportunities that persist today, are likely to be well compensated for their courage and patience as economic outcomes unfold in the months and years ahead.

New York City Mayor Eric Adams says the migrant crisis “will destroy” the city. Not so, say credit analysts and bondholders.

Extending duration to lock in higher yields, while implementing a barbell position as it relates to one’s duration exposure, is optimal in our view.