Municipal bonds were one of the top performing asset classes in 2015, registering a more than a 3% total return.
Municipal bonds had a solid year in 2015 and judging by the group's fundamentals the coming year should be similarly positive.
Many of the same macro factors that supported the muni market in 2015 like modest inflation, manageable supply and consistent demand will continue throughout 2016.
Things could get far worse before they get better for high yield bond investors, said Collin Martin, fixed income director at the Schwab Center for Financial Research.
Talk about being put on hold, the Federal Reserve might not make a move on interest rates until September unless the economy picks up.
Expect high-yield municipals to spring ahead of investment grade muni bonds in the first half of 2016, but fall back in terms of relative performance later on this year.
U.S. treasury yields are likely to remain low and range bound this year, and spreads right now look cheap to fundamentals in many cases.
A large number of investors have never seen the Federal Reserve in a hawkish mindset and that will create bond buying opportunities this year.
Federal Reserve Chief Janet Yellen did more than simply raise interest rates this week, she ushered in a new paradigm of gradualism.
The problems roiling the junk bond market are isolated to the energy sector and investors should use this selloff as a buying opportunity.