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No, this isn’t TAAG’s review of the latest hot releases on Netflix, Hulu or Amazon Prime…

From time to time, I like to use my turn on the blog to offer some insight as to what we’re paying attention to at TAAG at the moment. Most of these are not items that require their own post in and of themselves but are worth mentioning and might provoke additional thoughts or questions by clients or prospective clients.


While we’ve worked on guiding several clients through the mortgage refinance process over the last few years, rates are once again hitting historic lows. Recently, rates as low as 2.25% on a 15-year and 2.625% on a 30-year have been available, though the market continues to bounce up and down along the bottom and changes frequently.

If you haven’t refinanced or have, but still might be able to take advantage of rates below 3.5% or so, feel free to reach out to your advisor and we can look at your personal situation in more detail and see if the benefits of refinancing might make sense for you.

For those that may seek refinancing on their own, make sure you ask your lender or mortgage broker about Fannie Mae/Freddie Mac’s announcement this week of an “Adverse Market Fee” of 0.5% on most refinanced mortgages starting September 1 due to economic uncertainty.


Somewhat related to mortgage rates, we’ve been paying attention to the bond market as rising rates over the last several years reversed almost in an instant with the onset of the pandemic.

One area of particular interest is municipal bonds, which we utilize in non-retirement accounts due to their tax advantages. With state, municipal and other related entities having their budgets stretched to the limit by the pandemic and likely to see them stressed even further, we’ve been evaluating how much risk might exist in municipal bonds as an asset class.

There are essentially two types of municipal bond issues. General obligation bonds (GO bonds) are backed by the general revenue of the municipality issuing the bond. In other words, they are supported by the taxing power of the municipality or other government entity issuing the debt.

Revenue bonds, on the other hand, are tied to income from a specific project. Think hospital, airport, or stadium projects. These carry higher yields than GO bonds because they carry more risk, if these type of projects are stopped or stalled, interest payments to bondholders or the value of the bonds themselves can be impacted.

As part of this evaluation, we worked with Dimensional Fund Advisors (DFA), who manage the municipal bond funds we use in portfolios, to learn more about this potential risk. We were pleased to learn the following given the difference in type of bond explained above and the fact that only one municipal bond rated AA or better has defaulted in more than 50 years.

We continue to review whether it makes sense to pare down the concentration in the municipal portion of our portfolios in certain accounts but were encouraged by the lessons above.


The last item I wanted to touch on is our ongoing evaluation of our models and their fit to our long-term investment philosophy. One of those objectives is to balance the stock side of our portfolio to reflect the global diversity of companies available in public markets. Going back to the 1970s and 80s, there were times when more than 70% of publicly traded companies in the world were domiciled in the US.

By the end of 2012, that figure had dropped to 46%. Our portfolios, in turn, adjusted over time.

In the years since, that trend has reversed, and U.S. companies have consistently been at or near the mid-50% range. As such, we are evaluating small adjustments to U.S. and international exposure to reflect this in our models. Any adjustments will be done very patiently as part of our normal, disciplined rebalancing process as opposed to a one-time, companywide shift in all accounts. We do this to allow for sensitivity for trading costs, capital gains and other issues in each client’s unique situation.

These adjustments, while relatively infrequent and minor, are similar to our ongoing rebalancing discipline. They’re not much good for cocktail party fodder but are the small tweaks that allow portfolios to remain aligned with the philosophy that has continued to offer resiliency in bull and bear markets for going on 32 years.

If you have any questions on any of these topics or others, please let your advisor know and we can set up time to discuss further.

Have a great week!