Everything Is Great in Muni-Bond Market. That’s the Big Worry
- If everyone is on same side, it topples over ‘pretty easily’
- Money managers discuss outlook at Bloomberg News event
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In the municipal-bond market, everything’s going strongly in the right direction: prices have been rising, mutual funds have received new cash from investors for the past 57 weeks, and new debt sales have been gobbled up.
But Guy Davidson, chief investment officer of the municipal-debt business for AllianceBernstein, is still preparing for the risk that his firm’s outlook is wrong, given that he and other money-managers are largely in lockstep with expectations for another year of positive returns.