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By Miriam Sjoblom, CFA | 07-16-2009 01:43 PM

Best Opportunities in the Darkest Times

Franklin Templeton muni co-director Rafael Costas says the market crisis also brought deals that his team had never seen before.

Securities mentioned in this video
FKTFX Franklin CA Tax-Free Income A

Sjoblom: Just to kind of end things on a more positive note, you noted in your last shareholder report that it's periods of adversity that often come with great opportunity. We certainly seem to be in one of those periods or have been for a while now. I think that's kind of a common, classic axiom for long-term, value-oriented investors. You talked a little bit about the types of opportunities you're seeing already. Do you have anything to elaborate on that or just words of advice for muni fund investors at this time?

Costas: Well, you just said you actually believe the more you work, and the more you build on your experience, and in fact you see these great periods of opportunity that look really, really scary while they're taking place. A lot of us, as you know, here in the muni department at Franklin have been here for more than 20 years. I think, on average, we each have been here about 16 years, so we've gone through a few recessions together. We have never seen anything, and nor do we want to see it again, like the end of last year, but in the middle of that darkness, there were deals that we had never seen before and bargains like we had never seen before in terms of yields relative to what else was out there in the markets.

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