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Speaker 1: Bloomber Business News twenty four hours a day. If Bloomberg

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Speaker 1: dot com, the radio plus mobile last and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: This update drown to you by the accountants and advisers

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Speaker 1: at Eisner Emperor. Cyber security is on the mind of

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Speaker 1: every business leader. Managing cyber risk should beat you. Get

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Speaker 1: started with a cyber risk assessment. Learn more Eisner Emperor

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Speaker 1: dot com slash cyber risk. Global equities are rallying, the

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Speaker 1: pound is strengthening. The Moss two thousand eight on signs

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Speaker 1: of campaign for the UK to stay in the European

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Speaker 1: Union is gaining momentum before this week's referendum. We checked

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Speaker 1: the markets every fifteen minutes throughout the trading day on

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Speaker 1: Bloomberg and the S and P five hundred is higher,

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Speaker 1: up one point three percent or twenty six points to seven,

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Speaker 1: the down Joones Industrial average up one point four percent

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Speaker 1: or two hundred fifty three points, the seventeen thousand, nine

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Speaker 1: hundred twenty seven, and then as to acts up one

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Speaker 1: point four percent or sixty four points to forty eight

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Speaker 1: sixty three ten. Your treasury down seventeen thirty seconds, the

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Speaker 1: yield one point six six percent. Yield on the two

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Speaker 1: year is point seven one percent. NIMEX scrude oil up

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Speaker 1: one point six per cent or seventy eight cents to

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Speaker 1: forty eight seventy five a barrel Comax gold down eight

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Speaker 1: tenths percent or ten dollars sixty cents to twelve eighty

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Speaker 1: four twenty an ounce. The euro anollar thirteen forty three,

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Speaker 1: the British pound a dollar forty six thirty three, the

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Speaker 1: yen one oh four point four four. Del agreeing to

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Speaker 1: sell as software unit to buy out firm Francisco Partners

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Speaker 1: Management and the private equity arm of activist investor Elliott Management,

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Speaker 1: and Federal Mobile Holdings. Largest stockholder, activist investor Carl Icon

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Speaker 1: raising his offer to buy the remaining eighteen percent of

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Speaker 1: the auto parts maker. Icon Enterprises, raised its fit to

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Speaker 1: eight dollars a share from the seven dollars a share

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Speaker 1: offered in February. That's a Bloomberg business flash, Tom and

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Speaker 1: Mike Karen Moscow, thank you very much. Well, it is

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Speaker 1: tom uh at very bottom eight an extraordinarily volatile were

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Speaker 1: right now in the markets. We have seen, for example,

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Speaker 1: the Vix two weeks ago on June tenth, Friday three

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Speaker 1: last Friday nineteen. During the week last week over twenty

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Speaker 1: today back down to seventeen, the same sort of UH

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Speaker 1: moves have held in place for the bond market and

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Speaker 1: the currency market. How do you invest in a world

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Speaker 1: that is this volatile? Kate Warren is with Edward Jones.

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Speaker 1: She has to advise people on how to do that, Kate,

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Speaker 1: other than hiding under the bed, what's the best thing

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Speaker 1: for somebody to do in a time when you have

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Speaker 1: because this will be over Thursday, but in a time

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Speaker 1: when you have so many crazy things going on in

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Speaker 1: the world, how do you play that well? We actually

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Speaker 1: think that most investors should own UH quality companies that

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Speaker 1: can make their own fortunes in a world that's folatile

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Speaker 1: like this. And we like companies UH at the equa

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Speaker 1: of companies that have some global positioning so they'll benefit

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Speaker 1: from whatever is happening around the world, that pay dividends

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Speaker 1: and have a track record of increasing their dividends regularly.

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Speaker 1: We think those have the sustainable competitive advantages and that

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Speaker 1: makes them a good choice for portfolios, especially in this

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Speaker 1: world of volatility. And make one other point, which is

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Speaker 1: we don'ts be sure that you have enough in bonds

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Speaker 1: even though the rates were low, because even as we've

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Speaker 1: seen today, bonds tend to move in the opposite direction

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Speaker 1: from stocks. Would you argue that this is sort of

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Speaker 1: the ultimate argument for active management as opposed to passive investing.

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Speaker 1: I think that's partly the case, and the reason is

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Speaker 1: you want active managers who are looking at companies you

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Speaker 1: would that aren't necessarily overweight in a benchmark index which

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Speaker 1: passive investments tend to follow, and where they're really good

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Speaker 1: opportunities for growth US in an environment of very slow growth,

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Speaker 1: which is partly the backdrop to why people are even

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Speaker 1: voting thinking about voting for Brexit. We are honored to

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Speaker 1: have you on because you speak to real investors. We've

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Speaker 1: had a lot of lundie dog guests like David Blanchflower,

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Speaker 1: thrilled to have them on from Dartmouth College moments ago. Kate,

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Speaker 1: how do you respond to people who say, I just

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Speaker 1: can't do this with all the news flow that's out there,

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Speaker 1: How do you say to them? If bonds are priced

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Speaker 1: toro praction yields are where we never imagine they'd be,

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Speaker 1: how do you do an investment? I think that's a

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Speaker 1: really good question, because it is an environment where rates

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Speaker 1: are low, where everything looks expensive. But what we also

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Speaker 1: know is that we're not seeing any signs of inflation

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Speaker 1: out there, even though US inflation is picking up a

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Speaker 1: little bit. And that says that the biggest risk to

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Speaker 1: long term investors, which is that your portfolio and your

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Speaker 1: spending money is eroded away every day by higher prices,

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Speaker 1: isn't likely to be that much of a risk. So

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Speaker 1: those still low returns are which you're going to need

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Speaker 1: to be able to fund your retirement or to put

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Speaker 1: your kids through school. And I think the way you

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Speaker 1: address the essence of your question, which is there's lots

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Speaker 1: of stuff moving back and forth, is to realize that

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Speaker 1: that's really sort of like the waves in the ocean,

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Speaker 1: and that you want to focus on the tides to

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Speaker 1: gettin into the longer term trends and not pay so

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Speaker 1: much attention to pulls that swing from one moment to

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Speaker 1: the next and can make you feel really uneasy, but

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Speaker 1: those fundamentals are still going to draw the longer term

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Speaker 1: returns and um and environment that you'll be investing in.

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Speaker 1: We have this headline in tom keeping people on top

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Speaker 1: of everything political, the New York Times reporting that Donald

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Speaker 1: Chump has fired his campaign manager, Corey Gluwandowski. Oh he is.

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Speaker 1: This is basically the top guy, and he's been he's

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Speaker 1: been a lot of controversy. That they brought in Paul

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Speaker 1: Manaford to to to work with him, and the two

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Speaker 1: did not, according to reports, get along. They're having a

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Speaker 1: strategy meaning to try to fix the campaign. Uh. And

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Speaker 1: this is the first result that we are hearing. Didn't

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Speaker 1: move the markets. It's hard to tell what movies moving

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Speaker 1: the markets there right now? Okay, when you look at

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Speaker 1: the mix between equities and fixed I'm give us perspective

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Speaker 1: from Edward Jones, give us the waiting of the two.

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Speaker 1: And again I say it, with yields down, prices up,

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Speaker 1: how do you mix the two? We're told we're supposed

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Speaker 1: to do that. Great, What do I actually do well?

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Speaker 1: It actually depends on how uncomfortable you are with the

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Speaker 1: day to day headline and the day to day move

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Speaker 1: in stocks. That short term volatility is what you want

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Speaker 1: to be sure you don't turn it into an actual

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Speaker 1: loss in your capital. If you can stomach the day

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Speaker 1: to day moves, whether the vix's upper down and the

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Speaker 1: votes are bad or good, then you don't need so

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Speaker 1: much in fixed income or in bonds, And then we'd

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Speaker 1: probably be recommending for each individual that they assess that comfort,

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Speaker 1: but maybe something that's sixty percent in stacks and fixed income.

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Speaker 1: If you're really uncomfortable with that volatility, then you need

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Speaker 1: to have more in fixed income, even though the rates

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Speaker 1: of return aren't very high. I would say one other thing,

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Speaker 1: which is when you're thinking about all the headlines so

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Speaker 1: we're here, keep in mind that everybody is still at

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Speaker 1: the stores, everybody is still doing their day to day business,

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Speaker 1: and that you can derive some comfort if you're investing

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Speaker 1: in companies where you can actually see that the world

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Speaker 1: isn't changing that much and that people don't change their

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Speaker 1: behavior nearly as much as those head blinds change. And

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Speaker 1: a lot of the company as you're invested in actually

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Speaker 1: make their money because people keep doing the same thing

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Speaker 1: day after day, whether it's spreashing their tea or shopping

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Speaker 1: for crushies or going out to uh, you know, add

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Speaker 1: another iPhone because they have another, you know, if they've

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Speaker 1: broken and they need a new one. Oh, nobody in

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Speaker 1: this room would be like that of Mr McKee is

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Speaker 1: laughing at mean, folks, I actually finally one of my

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Speaker 1: children has never had an unbroken iPhone. I finally, um, Kate,

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Speaker 1: I finally did it myself. And the good news was

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Speaker 1: I can blame no one. It was totally mindful. And

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Speaker 1: good morning, Mr Cook if you're listening, is sometimes you

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Speaker 1: do on the West Coast, the Apple service Mike was

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Speaker 1: a miracle. To be honest, Kate, you said, don't forget bonds,

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Speaker 1: But which bonds would you like to remember in this situation,

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Speaker 1: because it's very hard to find one that you make

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Speaker 1: a whole lot of money, And um, I guess you're

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Speaker 1: just looking for one which you get your money back. Yes.

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Speaker 1: And so for many investors it's tom mis simple bonds

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Speaker 1: because they're more concerned or at least they're somewhat concerned

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Speaker 1: about taxes over time. Uh. And while the additional rate

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Speaker 1: you get isn't much above corporate bonds, UH, sometimes it's

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Speaker 1: a lot higher than now. For many people, the tax

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Speaker 1: advantage is still the thing to think about. UM. We

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Speaker 1: like corporate bonds essentially short and intermediate term more than

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Speaker 1: long term. But what you're looking for is, uh, you know,

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Speaker 1: the rates are love so it's unfortunately not a great

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Speaker 1: place to be saying, hey, I make a lot of money,

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Speaker 1: but what you're really looking for is that part of

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Speaker 1: your portfolio that gives you, you know, basically a return

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Speaker 1: over time that you can count on stable income. If

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Speaker 1: you're taking money out of your portfolio, it's just not

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Speaker 1: a lot in this environment. And we'll you know, look

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Speaker 1: at that and saying not good, but you don't want

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Speaker 1: to be out of it, just because the rate and

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Speaker 1: some of the tension of a single digit world playing

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Speaker 1: out in the politics we're covering here in London. Kate Warren,

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Speaker 1: thank you so much with Edward Jones. What a great

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Speaker 1: job by our team today to get the usual London

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Speaker 1: guests and the debate Michael McKee, but also people like

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Speaker 1: Kate Warren to balance things out. Mike. Is it a

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Speaker 1: busy economic week? I think it sort of is, even

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Speaker 1: though today it was quite It's a it's a medium

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Speaker 1: economic week, but made more interesting by the fact that

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Speaker 1: Janet Yellen will be testifying tomorrow and Wednesday up on

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Speaker 1: Capitol Hill, which you kind of know where she's coming from,

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Speaker 1: but you've got to pay attention anyway. We have on

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Speaker 1: Wednesday existing home sales and of course Thursday job was

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Speaker 1: claims Friday new home sales, so there are things to watch,

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Speaker 1: but it is really a Jennet Yellen dominated week. In

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Speaker 1: the United States, we sit here Brexit here. We say

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Speaker 1: thank you to our teams in London and in New York,

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Speaker 1: particularly to Breed Taylor who just he has put up

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Speaker 1: with you yelling and screaming this morning, yelling and screaming,

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Speaker 1: middle morning, yelling and screaming here at lunchtime and beyond UK.

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Speaker 1: We'll do this tomorrow from London. Bloomberg Surveillance