Since I retired about five years years ago I dialed my risk down by holding less equity and more fixed income. I have averaged a little better than a seven percent annual return since I retired. By holding cash I can put a special investment position into play during a stock market pullback. Generally, I have in the past made five to seven percent off of my spiffs sometimes more. So, for me, I await a better buying opportunity before opening an equity spiff position.
I'm also fully invested within the confines of my asset allocation of 20 percent cash, 40 percent income and 40 percent equity. At times I can overweight equities by up to 5 percent if felt warranted.
Thus, for me I have found it beneficial to hold a little extra cash to make some special buys from time to time during stock market pullbacks. Buy the dip then sell the rip and pocket the margin.
@FD1000 ... Sounds like we might be in the same hymn book but on a different page.

I never understood the cash thing when markets are going up?
For your cash portion....why not use a simple liquid index like SPY/QQQ with a close % for sell trailing stop.
In the last 3 months, the SPY made over 9% and QQQ over 15% and their price never lost more than 3.5% from any last top...(chart)

Thanks for these comments. I anticipate receiving repayment in full of an outstanding real estate secured loan (about 30% LTV) within about 30 days. I have allowed the % of stock holdings in my primary investment account to drift up in anticipation of this influx of new cash. It will represent about 10% of the total in this account once it is received. Looking at my current investment plan, about 20% of it will go into stocks with the balance into bonds (including into increases to my "near cash" ZEOIX, SEMRX, SHV, and JPST holdings). I will wind up with perhaps 53% in stocks. That's still on the high side of my long term 50% target....mostly due to the current stance of the global central bank crowd and persistently low interest rates. The details remain a work in progress, especially regarding how much volatility to take on with the bond side investments. So, reading these comments is helpful.

https://seekingalpha.com/article/4323075-data-update-3-for-2020-price-of-risk
Data Update 3 For 2020: The Price Of Risk
When investing, risk is a given, and if you choose to avoid it, at any cost, you will, and in the last decade, you have borne a staggering cost in terms of returns unearned.
If you want to earn higher returns, you have no choice but to expose yourself to risk, and when you do, the key question becomes whether you are being compensated sufficiently for taking that risk.
Since my market timing skills are non-existent, I prefer to stay market neutral and stick to valuing companies using the prevailing equity risk premiums.

https://finance.yahoo.com/news/vanguard-research-finds-financial-advice-145000852.html
Vanguard Research Finds Financial Advice Improves Portfolio Diversification For 9 in 10 Investors
PR NewswireFebruary 11, 2020, 8:50 AM CST
VALLEY FORGE, Pa., Feb. 11, 2020 /PRNewswire/ -- In a new Vanguard white paper, The value of advice: Improving portfolio diversification, researchers Cynthia Pagliaro and Steve Utkus demonstrate the material impact of financial advice on the construction of individual investors' portfolios. Analyzing the asset allocations of more than 44,000 Vanguard self-directed investors who adopted Vanguard Personal Advisor Services, the researchers found the implementation of advice improved portfolio construction for nearly 90% of the investors by addressing equity risk-taking, increasing international exposures, and reducing cash holdings.

SWISX, Schwab’s developped markets index fund, is good. You get a lot of Japan and no EM, so there is a bias built in. I prefer to use global funds for large cap international and hit the EM and S/Mid in separate funds. Maybe international will out perform one of these years, but the wait has been long. If you had put money into VEU 10 years ago, you’d have made a bit more than 5% per annum for your pain.

Another recyclable article among hundreds/thousands. Remember, media options are huge and why you find scary titles without proofs. The goal is for you to go to their site and by visiting the site the author/company gets paid.
When stocks go down 5+% you will see the crash is coming soon, valuations are too high. Stocks go up, valuations are too high and a crash may come soon.
Every several weeks...the following 10 funds have beaten the index...or what should you buy now...SS will be out of money...value will beat growth soon...EM will beat US stocks...Then recycle again.
Basically, I think that over 95% of the articles are useless.

Why stop there the following were wrong too 1. Gundlach forecasted 6% for 10 year treasury by next year 2. Bogle was wrong about SPY performances 3. Arnott missed so many forecasts 4. GMO was way wrong. 5. PE + PE 10 + inverted yield are off for months and years 6.for years many experts have said that EM and SC will outperform LC but they didn't

https://www.yahoo.com/finance/m/59ccfc55-7b15-31eb-8c79-a21d60181513/warren-buffett-had-a-tough.html
Warren had a tough year
CHAPEL HILL, N.C. — Last year may have been one of Warren Buffett’s worst years ever.
We won’t know for sure until Berkshire Hathaway BRK.A, +0.26% BRK.B, +0.20%, of which Buffett is chairman and CEO, releases its earnings Feb. 22, at which point we will learn how much the company’s net asset value grew last year. The company’s stock gained only 10.9% in 2019, 20.6 percentage points lower than the S&P 500’s SPX, +0.51% total return. Reached by me Feb. 10, Berkshire wouldn’t comment or confirm when the shareholder letter would be released.

Carew, since you asked about BMPAX, and I have not previously discussed this fund, I thought I might add a few comments. It is from the Intermediate Core Bond category, which is a little more in line with funds, that have higher investment grade holdings with low risk, in the intermediate duration category. It is almost exclusively devoted to securitized mortgages, with AA investment grade holdings, that M* categorizes as lower risk. It had a nice 6% total return in 2019, but historically the total return is much lower--not that different than other well known funds in that category. It seems to be a pretty conservative fund, and could provide some ballast and lower risk option in a conservative investors portfolio. BMPAX performance pattern is that it is a strong fund in down markets (2015 and 2018, etc), so it could be a nice fund if your portfolio is focusing on preservation of principal. Its Standard Deviation is below 2, bond holdings are strong investment grade holdings, and overall you can see the rationale for why M* rates this fund as a low risk fund in its category

The link that the page gives for Treasury yields is correct, but the yields it quotes for January 30, 2020 are way off on the long end.
"The current rate of the 30-year T-bond as of January 30, 2020, is 2.33%."
According to the Treasury page, the 30 year rate was 2.04%, while the 10 year rate was 1.57%, not the 1.88% given in the article.
The figures it's giving are for Jan 2, not Jan 30. Which shows that in the past month or so the yield curve has flattened considerably. That in turn makes long bonds (always a play on rate movements) an even higher risk proposition.
Looking at 10 year and below, yields are mostly between 1.5% and 1.6%. Meanwhile, VUSXX has a 7 day SEC yield of 1.52% with no interest rate risk, unlike individual Treasuries.
If you expect Treasury yields to drop more, then locking in a slightly higher yield on T-notes may make sense. Otherwise, ISTM that it's worth a handful of basis points to have the stability of a MMF.
Or forgo Treasuries altogether and stick with CDs. Why invest in a 1 year Treasury yielding 1.49% (as of February 7), when you can get a no-penalty 11 mo FDIC-insured CD yielding 2.0%?

In terms of pure returns, I think you've got it right. Hank analogized paying off the mortgage with buying a AAA rated 4% bond, and that's a good way to think of it.
However, there are also risk factors that go beyond guessing which investment will have the greater cumulative return at the end of ten years.
Suppose you invest the $150k in equity funds, figuring that over 10 years you'll do better or at least as well as a 4% guaranteed return. Consider the risk of an economic downturn. You could lose your job and the ability to generate the $1500/mo cash flow. At the same time your equity investment could be taking a nosedive, hurting your ability to make the monthly payments out of reserves.
On the other hand, suppose you paid off the mortgage, and then rates dropped a percent. You couldn't take advantage of this and "re-leverage" you home. If you took out a new, lower rate mortgage to invest the money, I don't believe the new mortgage would be deductible (you wouldn't be using it to buy or improve your home). If instead you kept your mortgage, then if rates dropped you could refinance and benefit from a lower (and deductible) monthly payment.
More generally, because mortgages come with put options (you can prepay at any time), mortgages are different from vanilla AAA rated bonds.
IMHO there's more to consider than just which option may get you the better return over the next ten years. FWIW, I've had to make this decision a few times. Sometimes I went one way, sometimes the other.

FD, I don't disagree with your statement above. The government bond oef category is a very high investment grade category, but within the category you do find some variance regarding duration and interest rate risk. Most of the intermediate duration bond funds above, had total return in 2019 in the 5.5% to 6+% range, but their 3 year performance is slightly below 3%. Interest rates have been very very low since the 2007/2008 financial crisis, and then we started seeing spikes in interest rates in the 2015/2016 period, and since then there has been a steady pressure to raise interest rates, with 2018 being a tough year. In 2019, we saw the Feds decide to take a "pause" in raising interest rates, and it appears they will continue that policy for most if not all of 2020. It is hard to predict rates, as you noted above, so I am of the general opinion that you need to know the difference between one year performance, and longer history of performance of at least 3 years.

I have a one year CD maturing tomorrow...that 2.65% yield was pretty sweet/fortunate for bucket 1 money. Based on recent comments and research, that will be split between IOFAX and SEMPX. These securitized offerings should hold up well if rates remain somewhat stable over the next 12 months or so. These 2 will pair with ZEOIX in equal weight.

I have been reading for years that
1) Interest rates can only go up
2) That EM stocks are a better value and soon will do better
3) That diversification is better while the SP500 performance + volatility was better
and one it's going to be true :-)

I agree with this article. Rates now are at one of the lowest levels ever seen. You can still make 4-5% in bonds using Multisector+Non Trad funds which I posted about at Bond mutual funds analysis
Several funds to consider are
SD lower than1=SEMMX,ANFIX,ANGLX
SD lower than 1.5=IISIX,TSIIX
SD lower than 2=VCFIX,/VCFAX,JMUIX/JMUTX,PIMIX
SD lower than 2.7=IOFIX,PUCZX,DPFNX,JMSIX

High rated bond funds did great since 2019 because rates decrease dramatically and this category has a higher correlation to rates change. If rates will stabilize or will not go down a lot these funds will not make anything close to 5%. Predicting rates is tricky but rates now are at one of the lowest levels ever seen.
Example: I selected FSTGX because it was the first on the list. If you look at longer-term performance for 3-5-10-15 years FSTGX annual performance is between 1.85% to 3.1%. I don't expect this fund to generate more per average annually than the above range in the next several years.

Thanks bee--I agree it is an excellent option. VFIIX standard deviation is 2.04, duration is 2.68, Credit Rating of AAA, M* Risk is average, 1/3yr Total Return is 5.75/2.97. In categories like Government Bond OEFs, Vanguard benefits with its very low ERs.

https://www.forbes.com/sites/mikepatton/2020/02/08/bond-fund-investors-face-rough-times-ahead/#12bf43581116
Bond Fund Investors Face Rough Times Ahead
Do you own one or more bond funds? If so, 2019 was a very good year, but don’t expect that to continue. You see, bonds do well when interest rates trend lower – as they did last year – but typically lose money when rates rise. And, with interest rates stuck at artificially low levels, at some point rates will rise, and bond funds will struggle to achieve a positive return. Here’s why.