@hank You noted:

I’m accepting this added risk to help compensate for the extraordinarily low current interest rates

The price performance benefit of those low yields:
YTD.......
--- MINT = +1.15% (Pimco Enhanced short maturity, AAA-BBB quality)
--- SHY = +3.04% (UST 1-3 yr bills)
--- IEI = +7.35% (UST 3-7 yr notes/bonds)
--- IEF = +12.2% (UST 7-10 yr bonds)
--- TIP = +8.5% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- LTPZ = + 24.1% (UST, long duration TIPs bonds
--- TLT = +27.3% (20+ Yr UST Bond
--- EDV = +36.4% (UST Vanguard extended duration bonds)
--- ZROZ = +39.2% (UST., AAA, long duration zero coupon bonds)
***Other, for reference, not AAA rated:
--- HYG = -.3% (high yield bonds, proxy ETF)
--- LQD = +9.8% (corp. bonds, various quality)
Balanced funds with properly positioned bond holdings have had great benefit to date to offset many equity positions which continue to struggle YTD.
Regards,
Catch

Hi @hank,
Thanks for posting your allocation and writing about how you portfolio is constructed. I'm going to study your alternative sleeve and see how this sleeve Xrays using a 50/30/20 weighting. Perhaps you would be willing to comment some more about it?
In looking at PRPFX it looks like it would be a good fit for my niche sleeve. It had the better downside and upsside performance over my current funds in the sleeve during the recent market swoon and the better returns out through 5 years after that the other funds have the advantage.
With this, I've now have placed it on my buy pending list awaiting better buying conditions as I just, for the most part, don't buy funds while they are at their 52 week highs.
Old_Skeet

The Vanguard Global Equity Fund is the only Vanguard fund that Marathon advises.
Marathon has advised this fund since its inception in 1995.
From the December 2018 issue of 'The Independent Advisor for Vanguard Investors' newsletter:
"Original manager Marathon Asset Management generated strong returns when Global Equity got its start. Vanguard then added Acadian Asset Manangement in 2004 and Alliance Bernstein in 2006, and performance suffered. Baillie Gifford was hired as a fourth sub-advisor in 2008, but oversaw just 5% of the portfolio for several years."
"Since Baillie Gifford came on board in April 2008 through the end of September 2018, Global Equity returned 78.9%. Marathon's separate account was up 101.0% - meaning the fund still hasn't performed as well in its new form as it would have under Marathon's sole management. Baillie Gifford's separate account gained a terrific 136.9%. And as I said, Acadian's individual record brings up the rear with a 72.9% return."

Although Vanguard is often associated with indexing, its actively managed funds had more than $1.4 trillion AUM as of 12/31/2019. This makes Vanguard the third-largest active investment manager in the U.S. Low fees and talented management teams (e.g. Wellington, Primecap, Baillie Gifford) provide a considerable advantage.
Here are some of my favorite Vanguard active equity funds:
VHCAX, VPCCX, VPMAX - 100% managed by Primecap.
VDIGX, VWIAX, VWENX - 100% managed by Wellington.
VEIRX - 64% managed by Wellington, 34% managed by Vanguard, 1% cash.
VWILX - 66% managed by Baillie Gifford, 33% managed by Schroder, 1% cash.
Vanguard Global Equity Fund (VHGEX) is also on my radar now since two of the
subadvisors were removed (Alliance Bernstein in 2012, Acadian in 2018).
VHGEX - 50% managed by Baillie Gifford, 47% managed by Marathon, 3% cash
Some actively managed Vanguard funds have too many subadvisors which adds unecessary complexity and often results in subpar performance.

“My normal asset allocation is 20/40/40. As you can see I am +5% heavy on the income side of my portfolio...”
Thanks Skeet, Since you and I are in similar boats age-wise, risk-wise, I’ll share the allocation model I’ve used for the past 2 years now. Like yours, it’s a “sleep well” fairly conservative allocation. I won’t detail individual holdings, with the exception of the alternatives, as it’s a fairly ambiguous area.
25% Balanced funds
25% Global Income funds
25% Alternatives *
15% Cash / Speculative holdings **
10% Real Asset funds
* Within the alternative sleeve in order of magnitude (largest to smallest): PRPFX, TMSRX, ABRZX
** With regard to the cash / speculative sleeve, my nominal position would be 100% cash. But currently about 30% of it is devoted to a couple speculative holdings: PIEQX and PRLAX. I’m accepting this added risk to help compensate for the extraordinarily low current interest rates and to take advantage of buying opportunities presented during the March-April meltdown. PRLAX, for instance, was down 50% YTD at the time of purchase. Currently off only about 25%.
NOT investment advice. Disclaimer follows:
“Persons attempting to find a motive in this narrative will be prosecuted; persons attempting to find a moral in it will be banished; persons attempting to find a plot in it will be shot. BY ORDER OF THE AUTHOR. Per G.G.,Chief of Ordnance” - Mark Twain

Hi guys,
As of Friday market close July 31st not much has changed in the barometer's reading as the barometer produced a reading of 128 indicating that the Index is overbought. In checking some of the barometer's data feeds ... I thought I'd share some of the inputs that might be of interest for the S&P 500 Index. The dividend yield is listed at 1.82%, the earnings yield is found to be 3.45%, earnings for the Index (TTM) are listed at $115.55 and the (TTM) P/E Ratio is listed at 28.12. However and interestingly, I'm finding that the dividend growth rate is listed at 6.43%.
Because of the fairly strong dividend growth rate Old_Skeet has been repositioning on the equity side of his portfolio and increasing his exposure to good dividend paying mutual funds and decreasing his exposure in some growth areas. Remember, I am retired and my focus is to grow my income stream since I am in the distribution phase of investing while at the same time, as a secondary objective, continue to grow my principal to offset the effects of inflation.
With this, Old_Skeet is wanting to see better meterics before he becomes a buyer of equity ballast. And, with this, I am keeping on ... keeping on ... with my current asset allocation of 15% cash, 45% income and 40% equity. My normal asset allocation is 20/40/40. As you can see I am +5% heavy on the income side of my portfolio due to low cash yields and overvalued equities. On the equity side I'm 25% in the growth and income area and 15% in the growth area. In addition, my portfolio has an income yield of about 3.4% with a distribution yield (which includes capital gain distributions) of about 5%.
Funds that I benchmark against (all with dividend yield's in the 3.4% to 3.5% range) are Income Fund of America (AMECX), Capital Income Builder (CAIBX), and American Funds Conserative G&I Allocation Fund (INPAX). A fund that I'm seeing some interest in is Cloumbia Flexible Capital Income, CFIAX. CFIAX has performed inline with my benchmark funds and with a higher yield at 4.8%. It just might soon become my 12th fund in my hybrid income sleeve.
My three best performing funds for the month of July were SPECX +7.70% ... ANWPX +7.18% ... and, DWGAX +6.70%.
Have a grand weekend ... and, I wish all ... "Good Investing."
Thanks for stopping by and reading.
I am ... Old_Skeet

According to the Time Magazine article (link, please), Martha "unloaded all 3,928 of her company shares just days before the FDA's decision had been announced to avoid losing an estimated $45,673."
She was not jailed for insider trading. Her conviction was "for obstruction of justice, making false statements and conspiracy for lying to investigators." These days, the Justice Department works hard at letting those things slide.
https://money.cnn.com/2018/05/31/news/companies/trump-martha-stewart-pardon/index.html
Fox News reports that the day Martha was dumping her shares, Waksal's friends and family combined dumped shares with a total value (not loss) of $3M.
"https://www.foxnews.com/story/the-rise-and-fall-of-imclone-systems
Let's put that in perspective. On July 27, right before the news hit Kodak granted options with an average exercise price of $4.67 (most with a $3 exercise price) to company insiders amounting to about:
1.75M to James V. Continenza, Chairman and CEO
45K to each of David E. Bullwinkle CFO, Roger W. Byrd VP, and Randy Vandagriff, VP
https://www.secform4.com/insider-trading/31235.htm
Conservatively figuring a gain of $15/share (with a $22.72 share price this morning), that's a profit of $26M for the CEO and $675K for each of the VPs. That makes Martha look like a piker, and Waksal's whole entourage seem penny ante compared to Continenza. A difference is that here the option grants were done by the board, so the timing is suspicious but potentially "legal".

This article provides some talking points for stock market skeptics. A couple of excerpts:

...yields on 30-year government bonds started to decline on Jan. 2, anticipating the fallout from the budding coronavirus crisis that had taken hold in China. Yields fell from 2.34% on that day to 0.94% on March 9, as the price of the benchmark 30-year bond leaped 29%. Only on Feb. 19—seven weeks later—did the S&P 500 Index begin its 35% slide. Fast forward and 30-year yields have fallen from 1.66% on June 8 to a recent 1.19% as their prices climbed 9%. The question is whether stocks will follow again, and with a similar lag of about seven weeks. The fundamental economic scene favors a repeat.
Recall the craze for Socks the Puppet and his dot-com buddies in the late 1990s. When that bubble broke, the Nasdaq Composite Index plunged 78%. Also recall the so-called Nifty Fifty group of stocks in the early 1970s. When the only companies of interest to investors made gimmick cameras, ran amusement parks and built motor homes, it was clear the basic economy was in trouble. What followed was the severe 1973-1975 recession and deep bear market. I believe the bond rally signals a renewed drop in stocks, with the S&P 500 down 30% to 40% from here as the great depth and length of the recession hits home.

https://finance.yahoo.com/news/bond-yields-sending-scary-signal-100003918.html

Another viewpoint -
Must be 25 years ago, we requested Kodak prepare a small batch of a potential API for investigational use.
In due time, a large bottle arrives. But, WTF ??? I've never heard of the stuff the label says it is.
I call Kodak. "Oh, it's the right stuff, we just put on the wrong label. We'll send you a new label."
WTF !!! This is for use in a human clinical trial. YOU ARE TAKING THIS STUFF BACK !
Just because a company has a certain expertise does not mean it has the required expertise. Worse, they may think they have the expertise, when they do not.

Trump probably has hand in it as he has hand out to get something as he never has enough. Trump wanted to give more money to FBI in the proposed stimulus plan for their existing building to modernize it so they will not move. If they move, a possible hotel/motel could move across the street and take business away from Trump industries.
Here is an article concerning Ross and a possible conflict of interest:
https://www.axios.com/wilbur-ross-growing-conflict-of-interest-problem-7c69357b-ca4d-42a2-a745-af8c495022aa.html
How about Trump wanting to delay the election? Problem is Congress has the ability to make that decision; not Trump.
You must be drinking the Rev. Jim Jones' or the POTUS' kool-aid?

I agree with that sentiment, and would offer higher praise than "decent". But IMHO that applies to those actively managed funds that Vanguard outsourced to companies like Wellington, Primecap, and Bailie Gifford.
https://mutualfundobserver.com/discuss/discussion/56592/time-to-get-jiggy-with-vwigx
M*, Vanguard's Best Active Large-Cap Funds
I'm inclined to take a closer look at funds submanaged by these money managers regardless of the family selling the funds. OTOH, Vanguard quant funds like US Value are run in house (at least in part) by Vanguard's quant group. Ignoring for the moment the question of whether quant funds are truly active funds, Vanguard doesn't seem to excel with them.
On the one hand, you have a fund like VGIAX, where Vanguard keeps a tight leash on what the fund can do. The result with this fund is a large cap blend that tracks the S&P 500 closely (R² of 99.82%) with a slightly higher beta and lower alpha than VFIAX. Why bother?
On the other hand, you have a fund like this VUVLX, where the leash is not so tight. From M*'s writeup: "changes made in 2016 resulted in a more flexible portfolio that has struggled to deliver." Given greater flexibility, the quant group didn't deliver: 2017, 2019, 2020 (YTD) - bottom quintile; 2018 - 73rd percentile.
M* reports a similar relaxing of constraints for VSEQX in 2016, with fairly similar results (decline in relative performance).
Investopedia blames some of this on Trump, or more precisely, his random tweets that make it harder for quant funds to function. FWIW.
https://www.investopedia.com/why-quant-funds-are-stumbling-as-bull-market-rallies-4589215

Day before the announcement on Kodak, trading went up to about 15X normal.
Great to see insider trading made great again. Crony capitalism at its best.

It's not just tux rentals but clothing sales (Men's Wearhouse, Jos. A. Bank, etc.). "There is not going to be as much demand given the work from home environment." (CNN story, link below.)
Tailored Brands had been working with bankruptcy advisors as early as mid-April. It wasn't as confident about its cash cushion as was Zeo Capital Advisors.
https://www.cnn.com/2020/06/14/investing/mens-wearhouse-bankruptcy-threat/index.html
Given the company's concerns over viability, it doesn't seem unreasonable that it took advantage of a standard grace period in the terms of the bonds. The semiannual interest payment was due July 1, but won't be in default until July 31.
As of Oct 31, ZEOIX owned $13.6M (par) in Men's Warehouse bonds, valued at $13.3M. The fund increased its position slightly, holding $14.8M (par), valued at $14.6M at the end of January.
But then ZEOIX doubled down, literally, increasing its position to $27.0M (par) as of April 30th. However, those bonds were valued at only $11.3M (42¢ on the dollar), a drop of 4/7 in value in three months.
Maybe Zeo thought it was getting a bargain basement deal, if the price had dropped before purchasing the extra bonds. Or maybe it bought all those bonds shortly before Tailored Brands started looking into bankruptcy in April. Hard to tell from the timing.

http://www.zeo.com/documents/Reports/2020.Q2.ZeoQuarterlyLetter.pdf?goal=0_c45a9658bc-7815b58e3a-332418909
a company that had enough cash on hand to pay interest decides not to. Is it unreasonable to expect that in March they should have known Proms were DOA for the time being?

I don't have a bone in this since I don't own MWFSX.
The monthly distributions are clearly going down, and they are a huge part of the total returns.
Date Dividends
July 31 will be around 0.72% to 0.75. Down from 2%-->1.8%-->1.6 and now to 0.75%
Jun 30, 2020 0.135 Dividend
May 29, 2020 0.153 Dividend
Apr 30, 2020 0.162 Dividend
Mar 31, 2020 0.184 Dividend
Feb 28, 2020 0.205 Dividend
Performance in the category is at 95% for one month and 86% for 3 months.

This daily update of economic and stock market trends used to require a subscription to the Wall Street journal, but after 8/1 is a stand alone daily email. For $135 a year it is a very useful source of detailed information ( all in chart form) on all sorts of financial and economic trends and worldwide data. He also has "food for thought" section that will tell you one day, for example, the relative price of cannabis nationwide, or each state's gas tax.
I have found it very useful especially regarding interest rates, economics and trends in money flows across the world
https://thedailyshot.com/the-daily-shot-sample-newsletter/

@wxman123
VFIIX has also provided a similar record since 1981 37 up years. The 2 down years were (-2.23%) in 2013 and (-0.95%) in 1994.

Just saw KODK stock is up another $32+ mid-day today.
https://www.cnbc.com/2020/07/28/kodak-soars-another-40percent-after-trump-announces-deal-to-manufacture-generic-drug-ingredients.html
https://markets.businessinsider.com/news/stocks/kodak-stock-price-surges-765-million-government-drug-loan-2020-7-1029444079#

https://www.sec.gov/Archives/edgar/data/836906/000168386320012215/f6527d1.htm
497 1 f6527d1.htm U.S. VALUE FUND MERGER
Vanguard U.S. Value Fund
Supplement Dated July 29, 2020, to the Prospectus and Summary Prospectus Dated January 31, 2020
Proposed Reorganization of Vanguard U.S. Value Fund into Vanguard Value Index Fund (collectively, the Funds)
The Board of Trustees of Vanguard Malvern Funds (the Trust) approved an agreement and plan of reorganization (the Agreement) whereby Vanguard U.S. Value Fund, a series of the Trust, would be reorganized with and into Vanguard Value Index Fund, a series of Vanguard Index Funds (the Proposal). The Proposal would consolidate the assets of the Funds and place U.S. Value Fund shareholders in a comparable fund with better historical long-term investment performance, deliver a large expense ratio reduction for U.S. Value Fund shareholders, and create a larger combined fund which we anticipate would achieve greater economies of scale.
The Proposal requires approval by U.S. Value Fund shareholders and will be submitted to shareholders at a special meeting to be held on or about January 22, 2021 (the Meeting). Prior to the Meeting, U.S. Value Fund shareholders will receive a combined proxy statement/prospectus requesting their votes on the Proposal. The combined proxy statement/prospectus will describe the Proposal, provide a description of the Value Index Fund, and include a comparison of the Funds. If shareholders approve the Proposal, and if certain conditions required by the Agreement are satisfied, the reorganization is expected to occur as soon as practicable after the Meeting.
Under the Agreement and after the closing, U.S. Value Fund shareholders will receive shares of the Value Index Fund in exchange for their shares of the U.S. Value Fund, and the U.S. Value Fund will cease operations.
We anticipate that the reorganization will qualify as a tax-free reorganization under the Internal Revenue Code of 1986, as amended.
Closed to New Accounts
Effective immediately, Vanguard U.S. Value Fund is closed to new accounts, and it will stop accepting purchase requests from existing accounts shortly before the reorganization is scheduled to occur.
© 2020 The Vanguard Group, Inc. All rights reserved.

Generally speaking, different years are good for some types of investments and bad for others. That's why 1994 is so interesting - little seems to have done particularly well.
Obviously 2008 was a disaster for equities, and serves to get one focused on bonds. Since junk bonds and to a lesser extent corporates tend to track equities, the further a fund strayed from Treasuries, the more likely it was to lose money that year.
To illustrate this, here's a chart for 2008 comparing intermediate Treasuries (VFITX up 13.8%), Treasury-laden IG market (AGG, up 6.2%), a good corporate bond fund (PIGIX up 2.2%), a corporate index (down 2.7%), and the average corporate bond fund (down 8.2%).
Shortening duration tempers swoons, so one is most likely to find funds that didn't lose money in 2008 either by investing shorter term or in government-backed securities. Another way to improve yield is to invest in MBSs that resemble these other bonds in duration and credit quality, but come with a higher coupon.

Using asset-backed securities in enhanced cash funds has a number of advantages. The interest rate risk or duration is similar to a money market instrument. The volatility of returns from interest rate moves should be fairly low, but a yield premium is available over money market assets.

https://www.ipe.com/enhanced-cash-and-the-naming-problem/25602.article
However, nothing comes for free. These higher yields have prepayment risk (negative convexity). That risk is somewhat hidden by the numbers and usually pays off. Until it doesn't. Look for threads along the lines of "XXX fund worked until it didn't".
One can even find MBS funds in the intermediate government category with won/lost records comparable to SNGVX Though for a variety of reasons I wouldn't personally use these "longer" term funds as cash substitutes.
SNGVX has an effective duration of 2.9 years and is full of GNMAs, FNMA's, etc.
PDMIX is called an intermediate term fund. It has an effective duration of 1.8 years and is full of GNMAs. Like SNGVX, it lost money in 2013: 2.37%. Outside of that, it's never had a losing year. But ... it only goes back to mid 1997. It wasn't tested in 1994. It also adds another layer of performance enhancement (and risk) with leverage.
VFIJX is also called an intermediate term fund. It has an even shorter effective duration of 1.0 years. Like SNGVX and PDMIX, it lost money in 2013: 2.13%. Unlike PDMIX it was around in 1994, and unlike SNGVX it did lose money that year: 0.95%, making its record 37-2 (it started in mid 1980).
With all these funds, it's a matter of taste. What sort of risks and of what size one is willing to take for what level of return. One gets different risk profiles by investing in different types of bonds. Then it's a matter of finding a good fund of that particular type.