In this conversation, Kathy Jones and Cooper Howard discuss the impact of climate shocks, particularly wildfires in Los Angeles, on the municipal bond market. They explore the risks associated with California municipal bonds, the financial implications for issuers, and the broader trends in climate-related events. Cooper emphasizes the importance of diversification for investors to mitigate potential risks and highlights the increasing frequency of climate shocks over the years. The discussion also touches on the role of federal assistance in managing the aftermath of such events. 

You can read more from Cooper Howard about municipal bonds, including the potential impact of climate shocks, on Schwab's Insights & Education site. 

Kathy and Liz Ann also analyze the latest inflation data and take a look ahead to the economic indicators that investors should be watching next week. 

On Investing is an original podcast from Charles Schwab. For more on the show, visit schwab.com/OnInvesting. 

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Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. 

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. 

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. 

Investing involves risk, including loss of principal.  

Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Tax-exempt bonds are not necessarily a suitable investment for all persons. Information related to a security's tax-exempt status (federal and in-state) is obtained from third parties, and Schwab does not guarantee its accuracy. Tax-exempt income may be subject to the Alternative Minimum Tax (AMT). Capital appreciation from bond funds and discounted bonds may be subject to state or local taxes. Capital gains are not exempt from federal income tax.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.

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