Investors in tax-exempt debt should be cautious about heeding recent reports about the possibility of widespread bankruptcy and default in the municipal market, and stop running away from solid, safe investments because of distorted opinions in the media. That was the advice from top portfolio managers and traders at DWS Investments. Phil Condon, head of muni portfolio management. and Ashton Goodfield, head of trading, recognized the financial hurdles faced by local governments, but stressed that because of the fundamental changes in the municipal landscape, the muni market should not be considered as "homogenous" as it once was. But for analysts to "sensationalize the stress that municipalities are under" sends the wrong message to investors.
Christine Albano writes for The Bond Buyer.
