Municipal Bond Forum
Detroit and the ‘buy-and-hold’ strategy
Q
“Buy-and-hold” strategy — impacted by the Detroit bankruptcy?
A
James A. Klotz responds:
If you are asking if the Detroit bankruptcy will cause us to change our general philosophy of buy and hold, it will not.
We do, however, on some occasions recommend the sale of certain bonds when there are fundamental changes in credit quality outlook.
Detroit falls into this category, as it had experienced multiple credit downgrades in recent years. This was not a difficult crisis to predict.
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The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.