Escrowed to maturity municipal bonds can be thought of as "tax-exempt" U.S. government bonds.

bantam inc jack duval de-risking municipal bond portfolios - new york certificate

New York State municipal bond certificate.

As I’ve written about here and here, environmental, pension, and healthcare costs are posing increasing risks to municipal bonds and their issuers.  Most investors, and their advisors, are unaware of these risks. Ways to De-Risk a Municipal Bond Portfolio Investors would be well served to de-risk their municipal bond holdings before these

risks manifest themselves in a systemic manner.  Some techniques to reduce risks include: Diversification: Buying Insured Bonds; Buying Escrowed to Maturity (“ETM”) Bonds. I’ll unpack each of these methods below. De-Risking with Municipal Bond Portfolio Diversification Since I’ve covered this in detail here, I won’t spend a lot…

There are very clear paths of transmission from natural disasters to economic disasters.

bantam inc jack duval climate change risk - san francisco earthquake and fire of 1906

San Francisco after the earthquake and fire of 1906.

Although there are many examples of how environmental shocks have affected local communities, there are fewer examples of how these shocks are transmitted to the macro economy. One of the clearest examples of an environmental shock leading to profound global instability is from the 1906 San Francisco earthquake.

Chart One: Timeline of the San Francisco Earthquake and Subsequent Financial Panic[1]   On April 18, 1906, San Francisco was hit with an 8.3 magnitude earthquake.  While the earthquake caused many buildings to collapse, it was the subsequent fires that did the most damage.  By the time the fires had burned out,…

While climate shocks tend to get the headlines, changes in climate trends are more damaging. 

bantam inc jack duval multi-family office - environmental risks hurricane michael

This is what a correlated portfolio looks like under environmental risk.

Environmental risk is rising.  As I write this, Hurricane Michael has just laid waste to a 200-mile swath of the Florida panhandle. Environmental Risks - The UN Report On October 8, 2018, the UN Intergovernmental Panel on Climate Change (“UNIPCC”)  issued a report which was commissioned at

the December 2015 Paris Agreement.  The objective of the report was the evaluate the effects of global warming of 1.5 degrees above pre-industrial levels.  The report was prepared by 91 authors and review editors from 40 countries and cites more than 6,000 scientific references.[1] The UNIPCC press release tell us what is already…

Come for the music, stay for the content.

I'm pleased to announce the launch of the new Bantam Podcast on iTunes.  You can find it here. The first episode deals with tax strategies for ultra-high net worth investors, which was covered in our Tax Alpha blog post.  I'll be adding many more episodes over the next few weeks,

so make sure to subscribe to get updates of when new episodes are posted. As a bonus to long-time readers of this blog, I've done the intro and outro music for the podcast.  Please let me know if you like my blazing chicken pickin' country style of guitar playing. Also,…

Structure should come last in estate planning.  What should come first, and what is actually much harder, is thinking deeply about what values, capabilities, skills, and ways of thinking the trust creator wants her heirs to develop.

bantam inc jack duval financial and estate planning backwards - cart before horse image

Don't do your estate planning this way.

Over the past few decades, estate planning has evolved from focusing on tax-efficient transfers, to asset protection, and is now set to evolve again.  This is my first post in a series looking at how estate planning is evolving to focus on the beneficiaries. Why Most Estate Planning is Done

Backwards Creating an estate plan that results in no estate taxes is a fairly trivial exercise.  Any good estate planning attorney can do it. However, solving for estate tax minimization is a mistake because it puts the focus on the assets and structures instead of the beneficiaries.  Indeed, it is…