Need to increase your understanding of the financial markets? If so, you’re not alone. “Retail investors lack basic financial literacy,” with “a weak grasp of financial concepts,” according to the findings of a recent study conducted by the Office of Investor Education and Advocacy of the U.S. Securities and Exchange Commission (SEC). The study was mandated by one of the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Certain socio-economic segments of the population have a longer road than others in achieving a higher level of financial literacy, the report states. Regardless, today’s world is one marked by unrivaled access to information and ever-increasing levels of transparency and accountability among financial markets.
That said, we’ve identified six websites that can help increase your level of financial savvy, specifically in the area of municipal bonds.
1. EMMA, whose full name is the Electronic Municipal Market Access System, is a service of the Municipal Securities Rulemaking Board (MSRB), the regulatory agency that oversees the municipal bond market. Launched in phases beginning in July of 2009, and continuing to expand, EMMA is a free, centralized resource for disclosure documents for specific bond issues, market pricing and trade data, and educational materials for municipal bond market participants. Its comprehensiveness is unrivaled. The site is so user-friendly that even though its structure is clear and intuitive, it includes a video showing newcomers how to navigate the site to find specific types of information.
2. The Bond Buyer, began as a daily newspaper covering municipal bond market news and data over 100 years ago. Its companion website was launched in 1997, and redesigned earlier this year. “The markets simply move faster today, and we recognized that our subscribers need to get information from us more quickly,” said Michael Stanton, Publisher of The Bond Buyer in an interview with MuniNetGuide.com. (See “The Bond Buyer Delivers – News is Just the Beginning.”) While the paper and website are still subscriber-based, some of its features – including selected articles, a breaking news ticker, and all videos – are available free of charge. The Bond Buyer also offers a free two-week trial for anyone seeking to get a better feel for its content.
3. LearnBonds.com is a relative newcomer to the playing field, but a great tool for retail investors. This free website, was launched in its current form in March 2012 with a goal “to help investors make smarter, more informed decisions about fixed income,” according to Marc Prosser, Publisher and one of the site’s co-founders. LearnBonds.com devotes roughly 20 percent of its content to municipal bonds. The “Municipal Bonds” section of the website includes a great introduction to municipal bonds, and the two basic types (general obligation and revenue) of municipal bonds. The website also includes market data and commentary courtesy of participating partners.
4. Facts You Should Know: 2012 Fact Sheet on State and Municipal Bankruptcy, Municipal Bonds and State and Local Pensions provides a four-page snapshot view of the current municipal bond market. A collaborative effort between 11 professional/trade organizations, and published on the International City/County Management Association (ICMA) website, this Fact Sheet is a great resource for (relatively) updated information about trends in public finance and the municipal bond market.
5. Investor.gov, sponsored by the U.S. Securities and Exchange Commission (SEC) Office of Investor Education and Advocacy, provides “Investing Basics” for several investment products. The Municipal Bonds section provides a broad overview of this market segment, along with a collection of helpful links to other SEC websites devoted to municipal bonds and municipal bond market updates.
6. An article entitled, “Well beyond Bonds: Digging into Reports from Muni Borrowers,” posted on the Reynolds National Center for Business Journalism website, is primarily aimed at journalists, but can also help a wider audience digest the information provided by a municipal bond’s official statement. Written by Amy Resnick, a veteran financial journalist and editor, the article discusses how to read through an official statement to gain insights into a state or local economy.
BOOKS: For those seeking a deeper look into the municipal bond market, we recommend several books that have been published over the past few years by industry experts:
- The Encyclopedia of Municipal Bonds, by Joe Mysak
- Investing in the High Yield Municipal Market, by Triet Nguyen
- The Handbook of Municipal Bonds, by Sylvan Feldstein
- The Fundamentals of Municipal Bonds, by the Securities Industry and Financial Markets Association (SIFMA)