Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from dealing with broker-advisors who’ve sold their clients municipal bonds or funds that have defaulted or lost money. One of the many falsehoods that brokers tell their clients is that all municipal bonds “are a sure thing.” While most highly-rated “munis” are generally secure investments, some aren’t and you could get burned.
Investors recently lost money in municipal bonds sold to finance operations at Graceland, the legendary Memphis home of Elvis Presley. While Graceland has remained a steady tourist attraction over the years, like many venues, it was hit hard during the COVID crisis.
To put it mildly, 2020 was a rotten year for most businesses depending upon tourism and hospitality. Bonds sold to finance those kinds of businesses didn’t fare well. Reports Bloomberg: “More than 50 municipal-bond issues worth $5 billion have defaulted, the most since 2011, according to Municipal Market Analytics, an independent research firm. Nearly two dozen more have drawn on reserve funds since the start of the year to cover debt payments when revenue fell short, a potential sign of more stress to come, according to data compiled by Bloomberg.”