Yields on 10-Year U.S. Treasury bonds sunk to an all-time low of 1.37% on July 5th, yet so far there’s been a mysterious absence of contrarians willing to step up to say that “the” secular low in bond yields is at hand. Evidently, strategists and economists have learned the painful lesson of the “widow-maker” trade (shorting Japanese government bonds). While there are few public bond bears, we’ve watched with interest in recent months as “commercial hedgers” in Treasury bond futures have steadily built up a sizable short position.

"(A)nd therefore never send to know for whom the bell tolls; it tolls for thee." John Donne, the writer, was certainly not referring to U.S. Treasury rates when he penned those words so long ago. In fact, he was discussing how all living beings are connected to one another as well as to the world. But today, this sentiment seems quite fitting as we contemplate the world of U.S. dollar–denominated fixed income.

Among challenges facing retirees, concern about income may be the biggest, says advisor Holly Mazzocca of Bartlett, an investment firm based in Cincinnati, Ohio.

After taking a hit in 2015, diversification proved its worth again in the first half of 2016. But a closer look at the catalysts for the recent success reminds us that the benefits of diversification have limits — and analysis of today’s market conditions suggests that investors should resist the urge to become complacent in their diversification strategy.

We have four interns this summer and today I took them to lunch.  One asked what I wrote about today.  I said the title of the piece is, “I Don’t Know How to Love Him” and, of course, they gave me a funny look.

The S&P 500 Index advanced 1.5% last week, marking the third straight week in which U.S. stocks advanced more than 1%. We attribute the recent rally to three factors: 1) A growing realization that equities are more attractive than bonds, given low Treasury yields; 2) An improving corporate earnings outlook for the next 12 months; and 3) A sense that Brexit risks should be relatively well contained thanks in part to stability in the banking system.

A flurry of good news lifted airline stocks higher this week, reversing a drop in altitude that’s weighed on the industry so far in 2016. Fueled primarily by a bullish report from Deutsche Bank, American Airlines, Delta Air Lines and United Continental collectively advanced 6.5 percent on Tuesday alone. The German bank’s all-clear signal halted a six-month slide on overcapacity, Brexit uncertainty and heightened fears of global terrorism.

In terms of monetary policy, we had expected the BOE to move into easing mode, though it chose not to so do at its July meeting, but we think the ECB will try to gauge the impact of the UK result, rather than rush to expand or extend its current program of bond purchases.

The flight to the U.S. markets since the British Brexit vote has sent many, but not all, yields to record lows. Virtually every market in which foreign investors participate has rallied strongly in recent weeks and has shown big yield declines thus far in 2016. The exception is the better-quality segments of the junk bond market, perhaps because foreign investors are not very active there.

10-year TIPS yield briefly went negative last week and the current yield is just 3 bps. TIPS yields have fallen around 75 basis points since the beginning of the year. This decline in yield has been accompanied by a rally in gold from $1060 to $1342. One of the more persistent relationships in the market place since 2003 has been this negative correlation between TIPS yields and gold prices. If history is any guide TIPS yields will probably be negative if gold rallies above $1400.

You might be familiar with the quote from the title from a few years ago. It is of course a play on words that I’ve seen several people use. I believe I first read it from Jack Bogle and as it relates to investing it is of course about not overtrading in response to news or other price-moving factors.

Earning investment income today is tough—and it’s probably going to stay that way. But there are opportunities in less traveled parts of the bond market. And they’re not as risky as you might think.

Many a spring and summer outdoor celebration culminates in a tug of war. It is where an equal number of folks hold onto each end of a long rope and seek to pull the other side across the midpoint line. We believe a tug of war has existed in the US stock market over the last year between two forces which have been pretty equal in force while pulling in opposite directions.

Negative real interest rates invalidate the theory of a risk-free rate as the foundation of long-term investment returns and also pose a long-term inflation risk. Investors should diversify into higher-yielding inflation-hedging asset classes to improve the chances of meeting their return targets.

Real per capita GDP has risen by a paltry 1.3% annualized since the current expansion began in 2009. This is less than half of the 2.7% average expansion since the records began in 1790. One of the most persistent impediments to growth has been the drag from fiscal policy, a constraint that is likely to become even more severe in the next decade. The standard of living, or real median household income, has only declined in the 2009-2016 expansion and stands at the same level reached in 1996.

Investors worried about locking up their capital for too long in private-credit investments may be missing the big picture: the higher-yielding cash flow they receive via private-credit distributions is, in fact, a form of liquidity.

In his mid-year outlook, Global Strategist for Allianz Global Investors Neil Dwane looks at how the biggest investment themes of early 2016 – including China, oil and diverging central bank policies – suddenly gave way to a new narrative: How will the UK’s impending exit from the EU change the game?

Sectors not directly related to the U.K. – like U.S. corporate credit – could be very attractive in an environment of extended support by central banks.

As I reported in my Blog last Thursday, US Treasury yields fell to record lows last week as global uncertainty remains high in the wake of the UK’s “Brexit” decision and growing fears about European banks, China, etc.

It’s been a stellar six months for gold investors. The yellow metal has surged 28 percent year-to-date, its best first half of the year since 1974. And now there are signs that the rally is just getting started.

The post Brexit change in sentiment has been swift and considerable. More specifically, the change in sentiment over the last two days has been swift and considerable. Indeed, prior to Monday the S&P 500 had rallied 6.4%, but 10-year Treasury Bond yields had declined about 8bps, crude oil was down 2%, copper was flat, gold was up 3% and counter cycle stocks had outperformed cyclicals by 44bps. Not exactly a risk-on type of setup, especially when keeping in mind that the major European stock indexes remain down nearly 20% in USD terms from their 2014 highs and banks everywhere look downright terrible.

The widespread financial-market volatility that followed the Brexit referendum highlighted the relative attractiveness of a bond market many investors have yet to discover—China.

Fear of market volatility and a repeat of 2008/09 have led many investors toward becoming overly cautious. Investors who cling to ‘safe’ investments might soon realize that there are unforeseen risks in being extremely risk averse.

Talk about diversification comes cheap. Actually diversifying one's portfolio is far more difficult.

In the world of of ZIRP/NIRP it is becoming more and more difficult for investors to find positive yielding government debt. The world is quickly approaching a situation where one of out every two government bonds has a negative yield. As of 7/7/16, only 57% of developed world government debt has a positive yield. And the vast majority of that debt has been issued by the US government.

Last week’s top conversations were started by Larry Swedroe, Wade Pfau and Adam Butler. They generated thoughtful discussions on: the myth of private equity and venture capital outperformance; Dimensional Fund Advisors’ target­date retirement income funds; and exposing the “active risks” of passive portfolios.

On June 23rd, voters in the U.K. shocked global markets by voting to leave the EU. In this report, we will examine the various paths the country may take in the coming months with regard to this issue, discuss the political lessons learned and the impact Brexit will have on other European nations. As always, we will conclude with the potential impact on markets.

Financial advisors are attracted to the ultra-high-net-worth (UHNW) market like iron filings to a magnet. The allure of potentially significant revenue streams indeed may blind them to what it will take to deal successfully in and with this market. That judgment results from decades of experience working with UHNW clients and advisors seeking to work with them as well as helping to develop an industry-leading educational program on areas of critical importance to UHNW clients.

The U.K. situation remains highly uncertain. Investors continue seeking the safety of government securities, but an increasing number of sovereign bonds around the world carry negative interest rates.

In spite of the many short-term market-moving events, the underlying economy has remained largely unchanged over the past five years. Each crisis has passed without the more pessimistic predictions becoming reality. And the global economy has continued to be stuck in low gear regardless of the unprecedented amount of central-bank stimulus—whether that stimulus has been quantitative easing, operation twist or negative interest rates. So from my perspective, we’ve been witnessing the wisdom of that old adage, “The more things change, the more they stay the same.”

In an uncertain world, safety is in high demand. US municipals benefited from Britain’s contentious vote to exit the European Union. Could anything knock them off course?

The global economic outlook has experienced a downward shock in recent weeks, largely as a result of the “Brexit” referendum where British citizens voted to exit the European Union, coupled with deterioration in China that has led it to accelerate the depreciation of its currency. That combined deterioration, coupled with expectations of further central bank easing, has resulted in a plunge in global interest rates, with $20 trillion of government debt (primarily in Japan and Europe) now sporting negative yields. The plunge in yields has also affected U.S. Treasury securities, where the 10-year Treasury bond yield dropped as low as 1.32% last week. This advance in asset prices isn’t a reflection of economic health. To the contrary, it is a yield-seeking race to the bottom resulting from a downward shock to the global economy.

This week’s calendar includes a pretty normal schedule, but not the most important economic reports. There will be an abundance of FedSpeak, with questions about last Friday’s employment data. Despite this, the real story will be the start of earnings season. Expectations are pretty low. Statements about the outlook are always important, but that is especially true right now. The financial media will be asking: Can the profit outlook sustain the rally in stocks?

Here we are at the halfway point of the year, less than two months away from the Rio 2016 Olympic Games. As a group, commodities are the top performing asset class, beating domestic equities, the U.S. dollar and Treasuries.

We spoke with 12 Loomis Sayles investment experts about the most pressing issues and provocative investment themes for the remainder of 2016. What are they watching? Read on for their insights.

While June 23’s Brexit referendum was a milestone in history, June 24 was host to a pretty rare event in the markets: Not only did 10-year Treasury yields drop from 1.56% to 1.43%, but the S&P 500 Index also dropped nearly 3.6%. How rare are these events? Since March 1967, simultaneous drops in yields and stocks of these sizes have occurred only 0.5% of the time. Investors can take away interesting lessons from these historical occurrences.

The unexpected occurred late last month: The UK voted to leave the European Union (EU). Global markets are reacting swiftly to this announcement, punishing stock prices around the globe and swinging currencies wildly. Although the markets were predicting a UK “stay”, this vote was always a very close race, with voters divided and the polls only a few points apart.

Chutes and Ladders is a child’s board game, based on a 10 by 10 grid numbered 1 to 100. Children are rewarded for good deeds by advancing up the ladder and drawing closer to the winning #100 square. Bad deeds cause you to go backwards, sliding down the chutes toward the beginning of the game at square #1. In the game, there are 9 ladders and 10 chutes. Let’s examine the issues facing the Fed within this simplistic construct.

The other day I stumbled across an item via Seeking Alpha that Japan’s Government Pension & Investment Fund (the public pension) had investment losses of $50 billion for the year ending in March against an asset base of $1.4 trillion. The losses were attributed to a rising yen and falling equity prices in Japan.

Now let’s reflect on a few quips we’ve heard this year. Somewhere near the February “lows” a couple of bulge-bracket investment banks told investors to dramatically reduce their exposure to stocks; and one foreign-based investment bank actually said to “sell everything.” Certainly such advice is at odds with Shad’s wisdom. While there are many other examples of such disingenuous market advice, fast forward to the Friday morning following the Brexit vote. Hereto, in their “rush to instantly inform,” many pundits gave disingenuous and even wrong advice. Our advice was to take a deep breath and do nothing that Friday.

Russ describes why the “risk “off” assets are thriving despite the “risk on” post Brexit vote.

Martin Wildy is portfolio manager of the Eventide Multi-Asset Income Fund. Martin has more than 10 years of experience as a portfolio manager and analyst, building sustainable portfolios of companies in the tech, banking, real estate, and other sectors. His fund actively invests in green bonds, “yieldcos” and MLPs. I spoke with Martin on June 24.

“Understand that securities are not net economic wealth. They are a claim of one party in the economy - by virtue of past saving - on the future output produced by others. Fundamentally, it's the act of value-added production that ‘injects’ purchasing power into the economy (as well as the objects available to be purchased), because by that action the economy has goods and services that did not exist previously with the same value. True wealth is embodied in the capacity to produce (productive capital, stored resources, infrastructure, knowledge), and net income is created when that capacity is expressed in productive activity that adds value that didn't exist before.

I do think we’re at a most extraordinary valuation metric across many bond markets that again goes further than just any possible impact on the United Kingdom. For Europe, this situation amplifies the negative growth shock.

Leading up to the June 23 referendum vote, markets underestimated the strength and widespread nature of the sentiment held by Britons intent on leaving the EU.

If nothing else, this alone should be seen as a positive consequence of Brexit. It’s too early to tell what direction the EU will take post-Brexit, or whether any material policy changes will be made, but it seems as if the cries of resentment and frustration that have risen up from England and Wales (and, to a lesser extent, Scotland and Northern Ireland) have not fallen on deaf ears.

One of the indications from the Brexit vote is that the quality of public discourse regarding important political and economic issues has been insufficient to resolve these issues. This will be a key issue to watch in regards to market risks.

A continuation of our last quarterly letter, “Tricky Times.” And, we emphasize again that this is a period of unusual crosscurrents. At the top of the list is the troubling amount of global debt, with government debt at around $60 trillion and with corporate debt almost equal thereto. Global debt to GDP is almost 300%. And the U.S. problematic too, with government debt equal to its GDP at around $20 trillion and growing faster than its economic growth.

Would knowing the timing of Fed rate hikes actually benefit equity investors?

The UK has voted to leave the European Union (EU) by a majority of 51.9% to 48.1%, and UK Prime Minister David Cameron has tendered his resignation on the back of the result. Voter turnout was very high at around 72%. While a high turnout was expected to benefit the “remain” camp, the reality appears to have been different.