FYI: The Fallacy of So-Called Safety. In the wake of the
Brexit, markets are, as usual, counting on monetary policy
to remain ultra-accommodative, a scenario that supports
both global stocks and bonds; with global growth stuck in
neutral, the momentum trade in high relative yielders and
securities with historic low volatility remains in place;
however, this honeymoon period in which both
reflationists and deflationists are rewarded will soon give
way to the fundamentals; valuations and risk premia
should become the determining factors for success,
hinging on what happens with currencies, commodities
and inflation; in our view, this leaves crowded and richly
priced bonds and bond-proxy stocks vulnerable. Consider
opportunities to improve valuation characteristics of
portfolios, trading credit for duration risk in fixed income
and value/quality for pure defensiveness in global stocks.
Regards,
Ted
http://www.morganstanleyfa.com/public/projectfiles/gicweekly.pdf 
