Jason Thomas, chief investment officer of San Francisco-based Aspiriant, said he's finding better value among certain bonds backed by revenue or property taxes than general- obligation bonds.
Political Question
"I don't really know how to evaluate the credit" of a general-obligation bond issued by the state of California, because "it's sort of a political question," said Los Angeles-based Thomas, who oversees $7.4 billion on behalf of investors with $5 million or more in assets.
He recently invested $1 million in Ocean Shores, Washington, local improvement district bonds rated BBB+ by Standard & Poor's that mature in 2031, at a pretax yield of 7.3%.
Investors who prefer to lock in a rate of return should consider holding bonds individually, BondView.com's Kane said.
"My mother-in-law, Florence, in Long Island, she holds them for 10 or 20 years and doesn't really care what happens in the ups and downs in the market," Kane said.