— Guest post from Peter Essele, senior investment research analyst

After the large uptick in rates and subsequent outflows from fixed income funds, the waters seem to have calmed recently, and investors are now beginning to move back into the space. One area, however, has continued to see outflows. While the taxable side of things only witnessed 4 weeks of outflows before a return to positive flows, the municipal bond category has recorded 13 straight weeks of outflows. Why is this happening?

It’s a slow news day on the economic front, and Jackson and I are on a plane to visit his grandparents, so I thought I’d extend the conversation about personal quantification and investing.

The idea “if you can’t measure it, you can’t manage it” is just as applicable in personal goals as it is in business. Maybe more so, because in your personal life you don’t have a net profit line to tell you whether you’re doing well. I’ve found that measurement can provide the impetus to keep going and to modify behaviors to be more effective.

Markets return to gains . . .

I am pleased to say that I’ve been asked to write another post for the CFA Institute’s Inside Investing blog. The idea for this one was to consider what we believe but can’t prove in investing. I like these posts because they move away from the day-to-day concerns about what to buy or sell and into the underlying assumptions that help determine the decisions we make.

Hope you enjoy reading it nearly as much as I did writing it.

One of the problems with what I do is keeping everything current. The gap between when I prepare a presentation and when I give it can sometimes lead to awkward results.

After I wrote yesterday’s post, I was discussing the results with a colleague who was much more downbeat than I had been. “Only 1.7 percent!” he pointed out, maintaining that this is quite a low growth rate, well below those in previous recoveries, and nothing to get excited about.

You know what? In absolute terms, he’s right. The 1.7-percent growth rate is disappointing based on history, is not a level that will make us all rich, and certainly needs to increase. But to me, that’s not the point.

Wow. While I like to think I get things right more often than not, I rarely get positive feedback this quickly. The economic numbers this morning were very interesting. Expectations for economic growth in the second quarter were substantially wrong, but for all the right reasons, which I pointed out yesterday.

We can expect the announcement of GDP growth for the second quarter to be lousy—around 1 percent or so if we’re lucky, less than that if we’re not. Why is this, and what does it say about the rest of the year?

The short answer is that we got what we asked for at the start of the year. If you remember, back then we had the fiscal cliff and a record, uncontrollable deficit. Some wanted higher taxes, others wanted reduced spending; everyone wanted a lower deficit.

In today’s post (the last in this series, for the moment), we’ll look at the U.S. stock market.

We are in the middle of a very significant bull market—up almost 150 percent since the bottom in 2009—and the question right now is whether the run can continue. I was on a CIO panel at Financial Advisor magazine’s alternative investments conference yesterday, and the views of my fellow panelists—a really impressive group, in which I was flattered to be included—ranged from major declines to consistent, multiyear advances. Even the pros disagree. My own views, as you know, are cautious. Why that is will become clear.

As regular readers know, I’ve been a long-term China bear. This attitude has become mainstream recently, but I still believe there’s value in thinking about China. First of all, I could still be wrong, and second, looking at China as an investment gives us another chance to ask some of the questions I posed the other day.

First, of course, is do we understand what’s going on? Earlier in the Chinese story, the answer was yes. China was using very low wage rates to attract manufacturing, the products of which were then sold to Western markets—a simple, well-proven business model. Recently, though, that model has developed cracks. Chinese wage rates are no longer as attractive, while demand from the West has dropped off.