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Strategies & Market Trends : Young and Older Folk Portfolio
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To: Smart_Asset who wrote (20980)10/6/2025 3:35:33 PM
From: Rincon v2.01 Recommendation

Recommended By
Smart_Asset

   of 23074
 
Re: MUC, Black Rock CA munis.

Depends on your tax bracket. I’m tax-disadvantaged in California, so these muni funds are golden. I get a significant boost in returns from them with about 10% of my dividend portfolio invested, which returns more than its 10% share in after tax income.

MUC’s NAV has not declined steadily since 2016. You can see from the chart below that NAV was range bound from 2015 until interest rates started to rise after 2020. Many rate-sensitive funds and stocks lost value after the Fed raised rates. It should be no surprise that municipal bond funds in particular are sensitive to interest rate changes. Now that interest rates are falling, the bonds and bond funds will grow both NAV and share price. The time to buy these funds is when interest rates are high and NAV and share prices are low: NOW.

Many are thinly traded, but MUC has decent volume making it easier to build a position in size. Use limit orders if you’re buying in larger blocks. I own eight of them. It’s nice having a reliable flow of monthly tax free income.

As to having a “big percentage of monies in a vehicle like MUC”, I see it as supplementing cashflow. It isn’t a hedge against inflation and there’s generally little growth unless the Fed continues to lower interest rates. But that’s not the kind of growth I can count on. These funds are just part of an overall investment and tax strategy.
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