I enjoyed reading about Dr. Madell's five year rolling periods of stock market returns. I've noticed this, as well, and have incoropated the five year rolling total return period principal, to assist me, in setting my portfolio's rate of distribution.
What I do is a relative simple strategy. Generally, I take a sum of no more than what one half of my five year average annual return has been. With this, my current distribution rate is now at about 3.25% since my total return on my portfolio has averaged about 6.5% annually for the past rolling five years. In this way, I have found that principal grows over time since the residual is left to increase and build capital formation. In addition, I'm running a 20% cash/40% income/40% equity portfolio which generates enough income without having to sell securities to meet my current distribution needs.
I realize that this distribution strategy is not for everyone as I'm just sharing how I govern and what I have found that has worked well for me and my family through the years. I used this strategy, years back, whan I was running my parents money, when they were retired, and I now use it for me and my wife.
Pretty neat and information packed study by Dr, Madell.
If you are retired and in the distribution phase of investing perhaps others can learn if more investors post how they set their rate of distrbution coming from their portfolio. Naturally, there is the RMD withdrawal requirement that is in place on retirment accounts. But, many of us have money invested outside of retirement accounts. Perhaps, Dr. Madell can write more on some strategies in an upcoming newsletter.
I wish all ... "Good Investing."
Old_Skeet
cc: @tmadell

I would note that Intermediate Core-Plus bond oefs, have a fair degree of diversity "between" different funds. If you want a very high grade of investment holdings, then fund like BCOIX and DODIX are appealing. If you want lower standard deviation and lower duration, somewhat similar to non-traditional and many multisector bond oefs, then a fund like MTGAX is appealing, with a standard deviation below 2 and duration close to 2 years. It seems that the longer duration funds like JAFIX, BCOIX, and MWTRX has benefited the most as the Feds hold interest rate steady for the last year. I am impressed that DODIX, with its A rating portfolio, and its low standard deviation close to 2, has been able to turn out double digit total return in the last year. You could easily hold several funds from this category, that are enough different from each other, to add another layer of diversification.

I do not or never have owned a "core" bond fund. I am not really sure what the benefits are. When comparing them to some non-traditional funds they are much more volatile. I will assume the higher credit rating in these funds are the attraction. It seems that many less volatile funds in other categories work just as well for ballast.

Agreed for the most part at present.
That said, I used to own a couple core/IB funds a few years ago. I recently jettisoned my last one, a residual holding in WAPIX, which was good while I owned but, but worthy future gains with it seemed iffy at best.
I currently run with a spattering of munis, multis, nontrad's and one preferred stock fund. I own bonds only because I need to own them as ballast** for my stock allocation and would rather let respective PM's slice/dice.
**Aside: Portfolio ballast to me is anything other than stocks.
Either way one's preference on core funds or others, dt IMO is doing a GREAT job here of covering bond categories and topics, and I wish him continued success with this thread and those initiatives.

https://www.governing.com/topics/finance/gov-three-ways-tax-reform-impacted-muni-market.html
The tax law changes also impacted the refinance/issuance of new bonds. As noted in above, from Dec 2018:
Muni Bond Supply Is Down
Far and away, the most notable effect that the tax overhaul had on the municipal market this year was through the elimination of a valuable cost-saving tool for municipalities. Called advanced refunding bonds, the tool allowed governments to refinance debt earlier, thus letting them take advantage of lower interest rates years sooner.
Losing this benefit has pushed down supply. By some estimates, it's cut refinancing activity by as much as 20 percent.

This post is about Intermediate Core-Plus bond oefs. In general, this is one of the more popular bond oef categories, with an emphasis on Investment Grade Bonds, typically with much diversification in its holdings. Some refer to this category as Multi-Sector lite. According to M*, this is the formal definition:
"Intermediate Core-Plus Bond
Intermediate-term core-plus bond portfolios invest primarily in investment-grade U.S. fixed-income issues including government, corporate, and securitized debt, but generally have greater flexibility than core offerings to hold non-core sectors such as corporate high yield, bank loan, emerging-markets debt, and non-U.S. currency exposures. Their durations (a measure of interest-rate sensitivity) typically range between 75% and 125% of the three-year average of the effective duration of the Morningstar Core Bond Index"
Here are several funds in that category worth considering:
1. BCOIX/BCOSX: Credit rating A, Standard Deviation 2.74, Duration 5.68, 1yr/3yr total
return 10.84/4.86
2. DODIX: Credit rating A, Standard Deviation 2.05, Duration 4.3, 1yr/3yr total return
10.02/4.74
3. JAFIX: Credit rating BBB, Standard Deviation 2.63, Duration 5.68, 1yr/3yr total return
10.28/4.11
4. MWTRX/MWTIX: Credit Rating BBB, Standard Deviation 2.87, Duration 5.92, total
return 1yr/3yr 9.93/4.36
5. MTGAX/MTGDX: Credit Rating BB, Standard Deviation 1.82, Duration 2.07, total
return 1yr/3yr 7.41/5.10
6. TGLMX/TGMNX: Credit Rating BB, Standard Deviation 3.07, Duration 5.80, total return
1yr/3yr 8.46/4.04
7. IICIX: Credit Rating BBB, Standard Deviation 2.83, Duration 5.94, total return 1yr/3yr
10.63/4.96
8. SGVAX: Credit Rating BB, Standard Deviation 2.14, Duration 3.00, total return 1yr/3yr
6.82/4.29
9. DBLTX/DLTNX: Credit Rating BB, Standard Deviation 2.08, Duration 3.89, total return
1 yr/3yr 6.64/3.71
Comments: I have owned many of these funds over the years, but my favorite funds are DODIX, BCOIX and MTGAX. If you have owned any of these funds, you are invited to discuss your experience with them.`

@msf...Muni income (though tax exempt) does increase AGI (Adjusted Gross Income) . Your links may have already mentioned this. I recall this fact when calculating AGI (for ACA Health insurance) a few years back.

Interesting to note that gains (on muni bonds) are tax free and losses (on muni bonds) can be claimed against other taxable gains.

@MSF
All my HY munis funds' monthly distributions for 2018 (and all priors years) were Fed exempt. I never buy single bond and probably will never do it in the future.

Relevance?

@MSF
All my HY munis funds' monthly distributions for 2018 (and all priors years) were Fed exempt. I never buy single bond and probably will never do it in the future.
=======
I made a mistake in my first post. Early 2019(not 2018) was the first time I ever bought HY Munis in an IRA and not taxable. I also did it again several weeks ago when HY Munis took off compared to Multisector funds. I'm a momentum investor.
Year to date...NHMAX 2%...ORNAX 1.9%...OPTAX 1.7%

http://funds-newsletter.com/jan20-newsletter/jan20-new.htm
T.maddell monthly newsletter Jan20
What Lies Ahead for Stocks? We May Be Able to Foresee This Better Than You Think
By Tom Madell
Article Summary: Based on 27 years of continuous data, five year periods of strong stock fund returns for two highly representative funds are surprisingly strongly negatively related to subsequent five year returns. If the relationship carries forth into the future, one can anticipate mid-single digit returns as the most likely average broadly diversified stock fund return for both US and international stocks.

Thanks @bee. This is what I most enjoy about MFO - the free exchange of ideas. I am not a financial advisor or expert. Just my “gut” reactions (worth maybe a nickel).
#1: Put It All In One Fund - Not me!
#2: Create Your Own Yield - I like the term “stream of return” better. One needs to have a reasonably steady stream of return in retirement as averaged out over the short / intermediate term. This may be accomplished with a broadly diversified portfolio and some prudent hedging and / or cash reserves. Unless it’s a tax consideration, I don’t think it matters whether that SOR comes from “income” or capital gains - particularly in tax-deferred accounts.
#3: Don’t Buy A Long-Term Care Policy - I’m agnostic on this one. Don’t know enough about the subject.
#4: Cut Your Portfolio Management Costs - Yes. Of course. But I won’t be driven into index funds. I still retain confidence that the good actively managed funds will do comparably well over longer time spans, in spite of indexing being all the rave today. Active is what I grew up with. I’ll stick with what I know (but have owned index funds on some rare occasions).
#5: Pay Off Your Mortgage Rapidly - Both sides are right. No correct answer. I’m happy to be carrying a small 3% fixed-rate mortgage on main residence. Also own a couple parcels that are paid off. Knock on wood - but I’ve been able to pull much higher than 3% annual on my (tax sheltered) conservative investments over more than 20 years in retirement. There’s an added advantage in having more liquidity at your disposal than if that money were sitting in the home. Like I said ... I can see both sides of this one.
#6: Moonlight - Hell no (not me)! - but others will feel differently. I’ll say here that I perform a lot of home maintenance which others would pay to have done. So, in a sense, I am working. But it’s my schedule - not somebody else’s.

Taxation of muni bonds is not so straightforward.
Thumbnail sketch:
- "gain" (actually accretion) due to OID is reportable annually as tax exempt interest (can affect SS, IRMAA)
- "gain" due to market discount is taxable as ordinary taxable income (unless de minimus, which is reported as cap gain); may be reported annually or upon bond redemption/sale
- "loss" is reported as amortized bond premium (ABP), essentially return of capital, on a yearly basis (see Form 1040-INT box 13). Cost basis is reduced accordingly.
- any additional loss is reported as capital loss at time of sale.
Simple examples:
$1K par bond is purchased for $900 (no OID), redeemed at maturity five years later for $1K. The $100 "gain" is reported as ordinary income.
$1K noncallable par bond is purchased for $1100, redeemed at maturity five years later for $1K. Each year, the tax-free interest is reduced by some amount (ABP) according to formula, which over five years totals $100. There is no loss; the adjusted purchase price is $1K.
The best pages I've found on muni bond taxation are at InvestingInBonds.com.
See http://investinginbonds.com/learnmore.asp?catid=8&subcatid=60
See also: https://scs.fidelity.com/webxpress/help/topics/learn_tax_info_year_to_date.shtml
The fun really begins when multiple considerations are combined. You can purchase an OID bond at a premium to its discounted price, called acquisition premium. In that case you have to net the OID accretion and the premium amortization.

https://www.forbes.com/sites/martinsosnoff/2020/01/22/how-to-maintain-and-compound-inherited-wealth/#3f98161f2f58
How To Maintain And Compound Inherited Wealth
First, a brief history of financial markets:
Stocks beat bonds over a 25- to 50-year time span.
Volatility of fixed income investments can equal that of equities in both directions.
The market (S&P 500 Index) can sell at book value, now at two times book. Bond yields can range from 1% to even 15% when inflation rages.
Thirty-year Treasuries, currently yield 2%, but in 1982 during FRB tightening hit 15%. Five-year paper, a comparable trajectory.
Inflation, now at 2%, rose to 8%, early eighties. It made our country uncompetitive, as in General Motors.
Dollar depreciation or appreciation can range between minus 25% to plus 25%.
Deep-seated financial risk lurks in almost every type of asset. Banks capitalized at $200 billion can self-destruct with hidden bad loans. American International Group needed a government package of $180 billion to remain solvent after guaranteeing sub-prime loans.
Municipalities, even countries, in turn can bankrupt themselves. Consider Greece and Venezuela. Brazil, Iceland and Thailand were world destabilizing forces through their overleveraged banks even though their GDPs were miniscule. Chicago, Detroit, Sacramento, possibly New Jersey currently and New York City some 20 years ago saw the wolf at their door.
Puerto Rico now hovers near basket case status, even shamelessly falsifying their hurricane mortality numbers.

https://www.fool.com/retirement/2020/01/22/the-top-12-401k-mistakes-to-avoid.aspx
The Top 12 401(k) Mistakes to Avoid
An employer-sponsored 401(k) account can be a wonderful thing, helping you amass hundreds of thousands of dollars for retirement. Don't make any of these mistakes, though, or they could cost you -- a lot.
Most people can't sock away $26,000 each year, but the table below shows how much you might amass over time investing various sums regularly and earning an average annual return of 8%:
Years of 8% Annual Growth
Balance if Investing $10,000/Year
Balance if Investing $15,000/Year
Balance if Investing $20,000/Year
5 years
$63,359
$95,039
$126,718
10 years
$156,455
$234,683
$312,910
15 years
$293,243
$439,865
$586,486
20 years
$494,229
$741,344
$988,458
25 years
$789,544
$1,184,316
$1,579,088
30 years
$1,223,459
$1,835,189
$2,446,918
401(k) mistakes that can cost you a lot
It's clear that you'll need to be diligent if you want to build wealth with your 401(k) account. You'll also want to avoid common pitfalls. Here are 12 common 401(k) mistakes that could cost you a lot, followed by a closer look at each:
Not participating in your 401(k) plan
Not contributing enough to your 401(k)
Not increasing your 401(k) contributions regularly
Not contributing enough to get the full employer 401(k) match
Loading up on too much company stock
Staying with your 401(k) plan's default investment choices
Picking the wrong mutual funds and investments
Ignoring fees in your 401(k)
Not considering the Roth 401(k)
Ignoring important 401(k) rules
Cashing out or borrowing from your 401(k)
Not appreciating the downsides of 401(k)s

@catch, you think the article is good. I think it's average. I have read so many generic articles with generic ideas. I like to discuss specifics and help people with uniques problems because most have unique situations. I made comments about each rule and what can be improved.
As I said before, the most important rule is for someone is to start early and invest 10-15% for many years and pay all the bills monthly on time and don't touch the savings.
If you like to discuss further on any rule please post about it.

“ The 60/40 Stock/Bond Rule is ubiquitous, and that’s stupid because it’s just not right for everyone. Asset allocation is the most important decision, and is designed to achieve objectives. Risk preference needs to be controlled by risk capacity. It’s easy to be smarter than 60/40”.
Strikes me as a “straw man” argument. If you lead off with a dumb enough assertion, than it’s pretty easy to knock it down. I’m not familiar with what fee-only advisors might recommend, but doubt it’s as uniform as he asserts. I did have a commission-based advisor in the early going and he seemed to want me and everybody else he worked with in the most aggressive (all equity) investments available. Likely, that was because he continually skimmed a % of our portfolios off through some type of back load (12-1B perhaps?) for years into the future. Think about that. We, the investors, took the added risk. The adviser stood to profit more depending on the degree of risk we took.
Most good fund houses today, like TRP, make-available a wide range of products across a wide risk spectrum. The classic 60/40 exists. It might even make a convenient starting point for a discussion of risk. But there’s nothing sacred about it. Nothing I’ve read in fund house literature today suggests that the 60/40 is right for everyone. Does John’s author even address the ultra-low bond yields today? That alone ought to make you think twice before plugging 40% into bonds - long dated ones anyway.

@FD1000
As noted earlier:
" to help with thinking and motivation regarding their hard earned money.

The various pieces of the article have been discussed here, too; over the years."
If there are pieces of the article that get some folks off their arses to take some action towards investing, all the better.
No, it is not the perfect write.
Hell, 90% of the folks I've talked investing with for 40 years, never get far off of their arse to take GREAT positive action to their monetary futures.
If some word or words gets someone motivated, to become more curious and study, all the better. Most of us at some time prior to having more time in the investment seat have moved forward from the words or a phrase discovered in a book or publication.
We have not a clue as to what, the majority of the 3,000 or so members here, they have knowledge of, regarding an investing background or desire.

None of the rules will make you wealthy. The best way for an average person it to start saving earlier and keep saving monthly thru 401K(or similar) for years. The more you save the better you will be. Basically, if you start early to meet your employer matching amount, then increase the amount by half of your raise annually to at least 15% you will be in a great shape.
#1: Put It All In One Fund-for most investors it's a good idea and why most 401K have target funds
#2: Create Your Own Yield-most average investors can use great Multisector+NonTrad bond funds for higher yield (examples: PIMIX,VCFIX,SEMMX,IOFIX,JMUTX,JMSIX). For advanced investors who don't mind the high volatility PCI,PDI

#3: Don’t Buy A Long-Term Care Policy-correct
#4: Cut Your Portfolio Management Costs-correct
#5: Pay Off Your Mortgage Rapidly-absolutely not. Do the math and decide based on the numbers. In 2012, at the lowest mortgage rates, I took home equity loan for 5 years at 1.99% interest with zero fees. We didn't need it but it was a no-brainer to know that I cam make much more than 2% in the next 5 years.
#6: Moonlight-no if you can. Select a profession that pays well
Basically, the article is average at best. It missed the most important rule of saving early and at least 10-15% for years. It failed on what bond funds to buy (not all bonds are treasuries) and CD,MM are not a good option. The rest was the easy part.

Help me connect a few dots, is Dennis Barran = @openice ?
For me, just reading and trying to understand, the fund seems like a 'great until it's not' fund. There have been several leveraged funds acclaimed here over the years but most if not all don't sustain and disappear over time. I hope this one is different and has the magic formula, but alas, not for me.

Forgive me if I'm repeating a piece of the puzzle that's already been stated but I think the Venture Capital Fund is leveraged a bit more than 2:1 and that's what's driving the outsized returns, that's the secret sauce. I haven't quite figured out how they managed to only lose 22 or 23% at the end of 2018 but I guess that suggests they did a good job picking stocks or they cut their leverage in between public reporting dates and we can't see that anywhere. At the end of Q3 2018 they were something like 217% long and at the end of Q4 2018 they were more like 270% long, which is probably why they recovered from the drawdown so quickly.
M* reports the portfolio exposures incorrectly because they account for the swaps the fund uses in the "other" investments but they don't account for the notional value of those swaps. M* counts the fund's asset allocation to these swaps based on the profit or loss the fund has on the swaps but the notional value is what really matters, not just the profit or loss. You can see the notional values of the swaps by looking at the fund's quarterly schedule of portfolio holdings at sec.gov/edgar.
Just my humble opinion but because of the leverage the Leland fund uses you can't really do a performance comparison with the Primecap fund, which uses no leverage, and call it apples to apples. I'm also not sure what you intended to compare, @openice, because POAGX started in 2004, not 1984 (that was Vanguard Primecap, VPMCX), POAGX has more than $10 billion of AUM, VPMCX has more like $69 billion, and I can't figure out what period of time your performance figures relate to, the roughly 9.5% for each of the 3 funds you were comparing. It doesn't seem to be the 3 years I thought you were suggesting for either POAGX or VPMCX.

@msf, Aren’t Treasury’s federal tax-exempt?

But let’s go back 20 years to early 2000, when the S&P 500 was at roughly 1500.
If you had bought then and held until now, that works out to be an average annual return of just 4%.
4% is better than zero… but it’s hardly anything to write home about.
[This return doesn’t factor in dividends, taxes, fund management fees, or inflation… but those effects all largely offset one another.]
...since 2000, the S&P 500 has returned just 4%, while a 20-year government bond would have paid you 6.9% over the same period. That’s a HUGE difference of nearly 3%.

A most slanted "analysis".
The nominal rate of return of VFINX, including dividends and management fees was about 6.2%. (A $10K investment on 1/22/2000 would have been worth $33,232.15 on 1/21/2020 according to this

M* chart.)
The article notes that the S&P 500 figures would have been lower after taxes. Mysteriously though, it doesn't likewise take note of the ordinary income taxes that would have been owed on interest paid year in, year out by long term bonds.
Sure, VFINX spins off taxable divs, and they're significant. A fact that article chose to ignore. Still, only part of VFINX's gain would have been taxed annually. In addition, starting in 2003 those divs would have been qualified, thus taxed at the lower cap gains rate. As would its appreciation have been taxed as cap gains upon sale at the end of 20 years.
Now let's talk about reinvestment risk. Had you purchased a Treasury in 2000, you would have received taxable interest of 6.9% on that principal each year. But you would not have gotten 6.9% on your reinvested interest. You would have ridden the yield curve all the way down to 2% over the next couple of decades.
Put together the taxes and the decline of rates on reinvested interest, and that 6.2% return on VFINX begins to look pretty good. And that's including the (lack of) returns through the "lost decade".