Note: This article is courtesy of Iris.xyz

By Frank Holmes

Fixed-income isn’t what it used to be.

As the Wall Street Journal reports, the total amount of global government bonds that bear negative yields—meaning it costs you to have the government hold your money—has now climbed to a massive $13 trillion.

This figure is likely to grow as yields continue to plumb the depths of negative territory, giving global investors little choice but to seek income elsewhere.

For some, it’s corporate debt. But even these securities have fallen significantly since the start of the year, many below zero. Bloomberg reports that roughly $512 billion worth of European, investment-grade corporate bonds now offer a negative yield.

It’s not much better in the U.S. Blue chip Walt Disney just issued a 10-year bond with the low, low yield of 1.85 percent.

For other investors, it’s American municipal bonds, which still offer attractive, tax-free income, not to mention low volatility and low default rates. Back in May, I shared with you how yield-starved foreign investors were piling into munis at an impressive clip, even though they’re ineligible to take advantage of the tax benefit. But no matter—at least it’s not costing them to participate, unlike a growing percentage of negative-yielding government debt.

Negative bond yields have also boosted demand for gold, which has had two of the most spectacular quarters in modern history. Although it doesn’t provide any income, the yellow metal has been treasured as an exceptional store of value, especially in times of political and macroeconomic uncertainty. Gold stocks are up more than 115 percent year-to-date, as measured by the NYSE Arca Gold Miners Index and Swiss financial services firm UBS puts gold prices near $1,400 by year’s end.

(Gold prices are also being supported right now by the likelihood that we’ve reached “peak gold.” According to my friend Pierre Lassonde, cofounder of Franco-Nevada, new discoveries have fallen steadily since the 1980s, while current mine production has not kept up with demand.)

Are Stocks the New Bonds?

The hunt for yield has also inevitably landed many income investors in dividend-paying stocks. According to Reuters, about 60 percent of S&P 500 Index stocks now offer dividend yields that exceed the 10-year Treasury yield, which hit an all-time low of 1.36 percent earlier this month.

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