Sage Advice Municipal Market Monitor 3Q2009

While not immune to all fixed income risks, municipal bonds, historically, as compared to other fixed income securities, have had low default rates and very low levels of price volatility as a result of predominantly buy and hold investors. However, to investors’ surprise, the municipal bond market, over the past 24 months, experienced a much higher level of price volatility akin to the general fixed income market. This higher volatility was exacerbated by multiple causes.