When Vanguard isn’t promoting their interests by urging us to adopt the Vanguarding lifestyle (how long until they drop the terrible marketing campaign?) they’re adopting the role of the parental figure – helping us temper our expectations about the direction of bond risks and returns.

We’re not trashing Vanguard. We love Vanguard. They have lots of attractive products and services available to advisors and investors alike. We find it late and redundant, however, that Vanguard joins the party and tells us what we already know – trees don’t grow to the sky and bonds can’t continue their meteoric rise in the face of the structural changes to the economic landscape.

Where’s the value in Vanguard’s latest treatise? It’s less about what they have to say and more about why they’re saying it. Known for their low costs Vanguard has long been the go to shop for bond mutual funds. They boast some of the largest the industry has to offer. This gives them an interesting perspective as they can watch the flow of funds into and out of their myriad offerings.

What Vanguard is telling us is that investors are ignoring economic and financial reality and blindly pouring money into “safe” fixed income investments. Why?…chasing returns?…avoiding risk?…both?…neither?

Whatever the motivation retail investors are seemingly continuing their self-defeating pattern of buying high and selling low. Who will save us from ourselves? Vanguard hopes to with their latest missive. Will we heed the call?