01/19/2026
With the U.S. economy still on shaky ground and signs that layoffs are still far from over, investing in Mortgage Backed Securities (MBS) might be best to avoid.
Between signs of the attempts to keep a recession from occurring (since 2020-2021), the CRE sector facing their 2006-2009 moment and a host of other factors, MBS investments could be highly risky if the housing market faces a recurrence of 2006-2009, especially if borrowers choose to walk away from homes that have a temporary negative equity position.
As for Municipals Bonds (muni's), one should use caution based on the issuer.
In the current environment and the fact that it may become the next target of fraud investigations, any bonds issued by California or local governments might be wise to avoid.
Add to that, the state is showing a complete lack of financial discipline and accepting any CA issued bonds is merely enabling a reckless spender living off debt while no one is taking a serious look at their creditworthiness.
No reason to chase yield as advisors stick to quality fixed income.
