February 8, 2016

More Issues Require More Diligence


 We know it’s impossible to generalize when talking about “the bond market”. Yet, it’s easy to fall into that trap. The SEC quote Betsy pointed out in her article reminds us of how complex and varied the municipal bond market is as compared to the corporate bond market. The first chart is total issuance for corporate bonds versus municipal bonds over the last 20 years, showing us that the gap between corporate and municipal debt has sharply risen in recent years. The second picture illustrates one of the reasons why dealing with municipal bonds is more like sifting through the proverbial “needle in the haystack”. In 2015, only 1,288 corporate issues were underwritten, totaling nearly $1.5 trillion. In muni-land, 14,012 issues came to market, accounting for only $414 billion in par value, that’s more than 10 times the number of corporate issues! These are just a couple of things to keep in mind when considering the best ways to stay on top of this vast and diverse marketplace.


Buying or selling munis? Consider the risks and opportunities of interest rate movement.

September 24, 2015


Preservation of capital is one of the fundamental reasons for investing in fixed income securities. Due to their structural nature, nearly all fixed income securities are impacted to some degree or another by changes in interest rates. The key to protecting one’s investment is to identify those types of fixed income securities that provide relatively low volatility while still meeting one’s investment objectives (i.e. tax-free income). Municipal bonds have historically met this litmus test. When astute investors consider purchasing municipal bonds they look at the impact of potentially higher interest rates as well as the risks should interest rates remain low for an even a longer period of time. The first step to developing a prudent strategy to suit your needs is to understand how any change in rates influences prices. We thought you would find this article concerning municipal bonds and interest rates (from the MSRB Education Center ) helpful if you are interested in learning more. As always, do not hesitate to call to discuss.

The yield curve is a depiction of interest rates for the same credit quality at different terms of maturity. It is also known as the term structure of interest rates. In this article, we discuss the U.S. Treasury yield curve, which is widely considered the most important interest rate benchmark in the world. The chart below illustrates the yield curve at three different times: the current yield curve (green line), the end of 2013 (blue line) and dated 10/09/2006 (red line)

Back to Basics: Yield Curves

by Anh “Annie” Tran, Portfolio Analyst


Chart 2: Red line as of 10/9/2006; Blue line end of 2013; Green line July 2015

A normal yield curve is upward sloping, reflecting the higher returns or yields demanded by investors to accommodate for higher risks associated with committing one’s money for a longer period of time. It also typically indicates the expectation of future economic growth that will fuel future inflation and as such, investors require higher yields to offset. The rate of increase decreases over time, which is why the slope of the curve is steep at first but gets flatter in the long end. The current yield curve (green line) is considered a normal yield curve. The yield curve changes over time and takes different shapes such as “humped”, “flat”, or “inverted”. The “inverted” yield curve shown (red line) was the curve around the prior peak of the stock market. These shapes are considered abnormal and are valuable indicators of economic growth. In fact, “inverted” yield curves, when short-term interest rates are higher than long-term interest rates, has been a reliable predictor of recession. As stated by the New York Fed , “The yield curve has predicted essentially every U.S. recession since 1950 with only one “false” signal, which preceded the credit crunch and slowdown in production in 1967.”

Published on Jul 28, 2015

Watch a video that traces the history of the municipal market and highlights the MSRB’s role in promoting fairness, transparency and efficiency since the self-regulatory organization was created by Congress in 1975.

CFI Supports Financial Literacy

CFI’s Director of Client Services, Susan Munson, teaching 8th and 9th grade girls about bonds and budgeting at the 5th Annual LIFEvest Financial Literacy Program. LIFEvest is just one of the impactful programs offered by the Center for Investment and Wealth Management (CIWM) at UC Irvine’s Paul Merage School of Business. Susan and Betsy, representing CFI, joined the board last year and Susan became an active member of the LIFEvest Steering Committee for this year’s event. If you are interested in learning more about how CIWM promotes financial literacy and best practices in wealth management, don’t hesitate to ask.

August, 2015

The contents herein are for informational purposes only, and under no circumstances are they to be construed as a recommendation of a solicitation. The informaton and opinions herein are subject to change without notice and CFI does not undertake to advise the reader of changes in opinion or information.

Pension Acronym

Cheat Sheet

ARC: Annual Required Contribution

ADC: Actuarially Determined Level

COLA: Cost of Living Adjustment

CSME: Cost Sharing Multiple Employer

FNP: Fiduciary Net Position

GASB: Governmental Accounting Standards Board

OPEB: Other Post-Employment Benefits

TPL: Total Pension Liability

UAAL: Unfunded Actuarial Accrued Liability



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“The three great essentials to achieve

anything worthwhile are, first, hard work; second, stick-to-itiveness;

third, common sense.”

- Thomas A. Edison

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Charles Fish Investments, Inc. (CFI) founded in 1984, is a Registered Investment Advisor with the Securities and Exchange Commission under the Investment Act of 1940 and notice filed with the California Department of Business Oversight. The firm, which is wholly-owned by its employees, is not affiliated with any broker/dealer. CFI's revenues are derived exclusively from the fees received for the investment advisory and/or management services provided.


ADV Part 2 A

Portfolio vs Funds