There's so much uncertainty since the election. I don't think any of us have a clue where things are heading. If Trump gets the kind of infrastructure stimulus package from Congress which many seem to think he intends, along with higher borrowing and tax cuts, that's bearish for bonds and bullish for just about everything else - at least for a year or two until the rising debt shocks us back into austerity. But he has Congress to deal with. Many commodities, notably copper, have turned up in recent days anticipating some type of stimulus. Big military buildups, as Trump appears to desire, also bolster an economy short term - especially the Northrups, Lockheeds, General Dynamics and Boeings of the world.
On the other hand, the first year of a new President's term usually isn't that good for equities. Both the Pres and FOMC like to get the the tough love out of the way early. The Pres., especially, wants things improving as the next election nears.
Bonds to some extent self-correct. As rates rise there's more income in the pockets of investors helping mitigate declining values. At some point bonds again begin to look attractive to new investors. I'd think, however, that going long on bonds (durations over 10 years) would have been foolish in recent years. It may take decades for those investors to break even. And yes - there were plenty of warnings here and elsewhere about the dangers of longer term bonds when the 10 year was yielding 2% or less.
---
I haven't made any changes to portfolio in recent months - except that a few weeks ago I shifted some $$ intended for near-term household expenses from Price's money market fund to their ultra-short bond fund. The new govt. money market regs caused money market fund yields to suffer even more, but pushed up rates on ultra-short high grade corporates. Even with the sharp sell off, TRBUX held at $5.01 - which surprised me. Since the election I've lost a half-percent on my investments. Balanced and energy/commodity related funds drifted higher. But my meager exposure to bonds - especially the international variety - got hammered. So it goes.

FYI: (Click On Article Title At Top Of Google Search)
In the past two weeks, bonds suddenly have become more appealing investments. Treasury yields have risen sharply since the election, with the 10-year note now yielding 2.33%, up from 1.85% on Nov. 8. The increase reflects expectations of higher federal spending, bigger deficits, stronger economic growth, and greater inflation under President-elect Donald J. Trump’s administration.
Regards,
Ted
https://www.google.com/#q=Bonds+Suddenly+Look+Like+a+Bargain.+What+to+Buy+Now+Barron's

FYI: American Century Ultra (TWCUX), a marquee name in the mutual fund industry, had a dynamite third quarter. Its 6.49% gain popped past the 5.59% average surge of its large-cap growth rivals as tracked by Morningstar. And the fund soared above the S&P 500, which tacked on a relatively modest 3.85% advance.
Regards,
Ted
http://www.investors.com/etfs-and-funds/mutual-funds/american-century-ultra-mutual-fund-is-poised-for-boost-from-tech-stock-rebound/
M* Snapshot TWCUX:
http://www.morningstar.com/funds/xnas/twcux/quote.html
Lipper Snapshot TWCUX:
http://www.marketwatch.com/investing/Fund/TWCUX
TWCUX Is Unranked In The (LCG) fund category By U.S. News & world Report
http://money.usnews.com/funds/mutual-funds/large-growth/american-century-ultra-fund/twcux:

@Crash said "rising rates are hurting REIT funds"
Here's some "medicine" for that ailment.
Reefer REIT: Innovative Industrial Properties' IPO
Nov. 9, 2016 9:34 AM ET
Innovative Industrial Properties, Inc (Pending:IIPR) has filed for an IPO seeking to raise $175 million. Innovative Industrial seeks to become the first REIT to monetize the growing medicinal marijuana industry utilizing sale-leaseback transactions and offer investors an indirect method to capitalize on the sector. In a time where REITs find cap rates compressing in most industries, Innovative Industrial hopes to prove the medicinal marijuana industry is a cash cow for investors.
http://seekingalpha.com/article/4021523-reefer-reit-innovative-industrial-properties-ipo
....who would have imagined that there would be a "weed REIT", Innovative Industrial Properties was to list on the NYSE this week. According to the company's website, it "targets medical-use cannabis facilities for acquisition, including sale-leaseback transactions, with tenants that are licensed growers under long-term triple-net leases."
Innovative believes this industry is poised for significant growth in coming years, and is focused on being a creative capital provider to this industry
http://seekingalpha.com/article/4024483-reit-world-back-business
Innovative Industrial Properties™
Removing Financial Barriers For Licensed Medical-Use Cannabis Growers™
Our Team
Industry Leaders
Our Market
The Licensed Medical-Use Cannabis Industry
Our Properties
Medical-Use Cannabis Cultivation and Processing Facilities
Our Tenants
Sophisticated, Best-in-Class Medical-Use Cannabis Growers
Our Leases
Long-Term, Triple-Net Arrangements
http://innovativeindustrialproperties.com/business

@MJG: "I am a long term investor so I hesitate to address issues associated with the influence of "hot money". I just don't play in that arena and have not thought much about it."
Thanks for your response. It's helpful but may not (as you suggest) answer my fundamental question of how much long-term investors like you are injured by other less disciplined investors who flood funds (including those using passive index based strategies) with money when valuations are high and than stampede out after large market declines. Whether in actively managed or passively managed funds, this herd instinct would appear to work against all of us because the fund is forced to some extent to buy high and sell low. Perhaps I have this wrong. Wonder if there's been any studies attempting to quantify this negative influence, especially regarding actively managed funds.
Here's a different but related issue with funds: Like you, I am largely buy and hold. But I've been known to speculate on beaten-up (highly focused) funds over very short time frames (measured in months rather than years) and than sell after a nice bounce (may not always work). The fund industry calls this "skimming" and works hard to prevent it. However - if I make a fast 25%-35% profit on a short term speculative venture, I assume that money had to come from somewhere. I further assume it's the "stay-put" long-term investors who picked up the tab. ??

Don't put all your eggs in one basket !
Derf

Been doing just that since 1985. I never was much for conventional wisdom.
Edit: The above is incorrect. Been doing that since 1966. Just it took me till 1985 to figure out how to turn it into a consistent market beating strategy.

I've read in more than one place (don't have references at the moment) that managed funds do NOT perform better than indexes/ETFs before, during, or after bear markets.
But regarding this, I take a long-term view (5-10 years) on everything. A one or two-year record doesn't mean much.

Speaking of the US $$$..
Jeffery Gundlach in Tue's Webcast did not "pound the table" predicting a higher US $$$$ but stated it would not surprise him to see 120 in the next two years...Also,"don't over analyse" and "keep your seatbelts fastened" Earlier he said he was not interested in becoming US Treasurer.in effect saying " I want to remain brutally honest and politicians are seldom if ever that. ." Closed End Fund Webcast Nov 8th https://event.webcasts.com/viewer/event.jsp?ei=1085775
BUSINESS NEWS | Thu Nov 17, 2016 | 10:56pm EST By Hideyuki Sano | TOKYO Reuters
Rising U.S. yields help dollar to 13-1/2 year high
..rising U.S. bond yields carried the dollar to a more than 13-1/2 year high against a
basket of major currencies, fueled by expectations that President-elect Donald Trump's policies will lead to higher interest rates.
The dollar's index against a basket of six major currencies rose above its "double top" touched in March and December of 2015. The index now stands at its highest level since April 2003. "Double top" is a technical analysis term describing a currency (or other liquid asset) rising to a high, falling, and then rising again to the same level. Breaking the double top is often seen as a bullish sign by technical analysts.
A rising dollar is particularly a problem for some emerging economies that could see capital outflows if investors shift more funds to the United States.
http://www.reuters.com/article/us-global-markets-idUSKBN13D040?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+reuters/businessNews+(Business+News)

http://cdn.tradingeconomics.com/charts/united-states-currency.png?s=dxy&v=201611180455r&d1=20110101&d2=20161231
http://www.tradingeconomics.com/united-states/currency

Here is a more accessible version:
http://mobile.usablenet.com/mt/www.barrons.com/articles/4-managers-who-consistently-beat-the-market-1452318197
I thought Ahlsten was responsible for Dodson's latterday success, but am out of that family.

Hi Guys,
Nothing could be more misleading than the title of this referenced article. The article does acknowledge that there are smart active fund managers among many who are not so smart, but time and fees work against the small cohort of successful active fund managers.
Here is a Link that summarizes just how small that cohort of smart active fund managers is:
https://www.justetf.com/uk/news/passive-investing/the-proof-that-active-managers-cannot-beat-the-market.html
The odds are not attractive. This article clearly demonstrates the high percentage of actively managed funds that fail to beat appropriate benchmarks. I was surprised by the dismal records registered by funds outside the US marketplace. I wrongly believed that foreign operated actively managed mutual funds were superior in their limited market sphere. The data seems to demonstrate otherwise.
Although forecasting which funds will be winners in the future is a hazardous challenge, some actively managed funds have terrific past performance records. So history can serve as an imperfect guide on the basis that positive momentum might persist. Recently I have added a mix of Index products to my portfolio, but I still own a few actively managed funds that have delivered acceptable performance.
Market beating funds are out there. They are few in number so they may be difficult to find. The long term performance records do identify some of these attractive products. Here is a Link to a short list published by Barron's:
http://www.barrons.com/articles/4-managers-who-consistently-beat-the-market-1452318197
Although the list is very short, it is supplemented with some near misses that are also identified. Hope is eternal. Enjoy and profit.
Best Wishes.

All of the above illustrates the dilemma of finding a way to wring income out of a sector ( Bonds) that is so overbought. Look what has happened to Munis in the last two weeks.. an entire year's income gone.
I had a large position in FFHRX in May 2015 after which it lost 9% in the next nine months, souring me on BL funds for a while
Kiplinger's Income Newsletter portfolio ( widely diversified with MLPs, Taxable and Muni Bond Funds, Dividend stocks) has had an income return of about 16 % since 1/1/2014 (about 6% a year) but the principal has declined 5% in that time so a retiree would see their nest egg shrink (and it was far worse in March before the current rebound in energy!)
A quick M* chart from May 2015 to March 2016 of some of the above funds shows losses of up to 8% ( RSIVX ), and of course those funds with the higher yields lost the most. PONDX somehow sailed right thru, but the leverage is a huge concern.
No one has mentioned ZEOIX which held up nicely but still pays 2.4% . Maybe better to accept a lower income stream (if you can) than to see your money melt away as rates rise.
There is no such thing as a free lunch

@Joe - As noted in the Investopedia page cited by @AndyJ, these bank loan notes have fairly high recovery rates, because they are collateralized and because they are senior to other debt. That doesn't affect the risk of default, but it does mean that you can expect to lose less than "ordinary" junk when they do default. So it is reasonable to count on getting back a good chunk of principal (not interest).
You can find retail share classes of these funds in Schwab OneSource: LABAX is there, BASIX is offered, and LALDX is open as well.
Remember, BobC is a professional. Don't try his share classes at home. :-)
Thanks for the leverage note on PONDX. Its a good fund, well managed. But I remember having taken a look at it and noticing something. I'd forgotten what that something was. Here's a M* thread on the fund's risks (w/contributions by Sam Lee).

"Trump adviser ... Scaramucci has compared the fiduciary rule [for IRAs, 401Ks] to the infamous Dred Scott decision, a 1857 Supreme Court ruling that denied black Americans citizenship."
Would that be because the SEC rule would hold financial advisors slaves to the truth? I'm really having trouble parsing this comment.

FWIW, I ran a M* screen on taxable bond funds with duration greater than 4, and found 525 distinct funds (one share class per fund). Of these, over 40% (212) had three month returns greater than -2.0%. That's not to say that one would want to own many of these 212 funds, just that they're not hard to find if one looks at the whole universe of funds.
Reiterating what I wrote above, what matters is not what's in the rear view mirror, but what one expects going forward. If further changes in rates are moderate (albeit volatile), then one can get modest positive returns going forward without taking on additional credit risk.
One of those risks is linked with interest risk, because if rates do rise quickly that can be detrimental to businesses and thus trigger defaults. On the other hand rates can rise is response to an improving economy. In that case, risk of defaults goes down.
Why take on duration risk? Because the higher yield (especially now that rates have risen) can mitigate some of that risk. Following the suggestion of using short duration funds, I ran a second screen for funds yielding over 4% (TTM) having duration under 1.5%. Just 38 funds showed up, of which over half (20) were bank loan funds.
Five were junk bonds. Most of the rest were "nontraditional", meaning almost anything. There was also one multisector bond - RSIVX. I'm sure several people here can comment on that option.
Personally, my feeling is that in uncertain times don't just do something, stand there. Especially if you have built a well diversified portfolio.

Just a comment that we track about 85 fixed-income funds and ETFs. Of that, only 20 are positive for the last three months. And only 8 are up more than 1%. My observation is that investors should be in relatively short durations, since with few exceptions any fund with a duration greater than 4-5 is down 2-10% during the last three months. As fears of significantly higher inflation and rates ease, the picture should become clearer, but why take on duration when you can get a 4-5% yield with a duration of less than 1.5? Like others, I am skeptical of the flight to floating rates and am fearful this play could become problematic. We still like OSTIX, LASYX, BSIIX, LLDYX, and PONDX.

Here is a screen capture of your first entry which shows IEF neither blue nor underlined. PIMIX is blue, underlined and I can select it for research.

Hi @chip
The below, with missing highlight for etf's, started/changed around Nov. 10. At least with this laptop.
Anyone else find the same status?
Thank you and Regards,
Catch
IEF
PIMIX

Hi Guys,
There are many "tale of two investors". Ted has referenced one of them. Ted, it's a superior post. I loved it.
I find yet another tale of two investors more educational. Here is the Link to it:
http://www.huffingtonpost.com/dan-solin/a-tale-of-two-investors_b_5206530.html
I am much more like Mary in the story; I suspect many MFOers are like Paul. That's what makes for a marketplace.
Here is yet another Link to yet another tale of two investors:
http://fortune.com/contentfrom/2015/5/13/tale-of-two-investors/ntv_a/T7wBAJ7oCAfxgFA/
This reference features a rather strong advocacy for supplemental Monte Carlo analyses to backstop the investment decision. So do I. Monte Carlo techniques were developed during WW II while searching for the atomic bomb secrets. Monte Carlo helped at that time and can help once again. It was developed to explore likelihoods under uncertainties. That defines the marketplace, so Monte Carlo is a natural winner here.
If nothing else, I am constant in my postings.
Best Regards.

@Ted. Thank you for the link.
My biggest take away from some of the words related to some of the pension funds is that; let us (pension fund managers) blame the sad state of affairs of gains since the market melt 9 years ago on low yields. The pension funds are going to run out of money and/or be forced to reduce future benefits or BOTH. Hell yes, they are and will. Guess that underfunding doesn't help much either, eh?
From the article:
Government-bond yields have risen since Donald Trump was elected U.S. president, though few investors expect a prolonged climb. Regardless, the ultralow bond yields of recent years have already hindered the most straightforward way for retirement funds to recover—through investment gains.
>>> So, no investment gains from price appreciation that many bond types have had over the past nine years??? Ya, right! If these managers have not made money from bonds in past years, they need to find new work. Losses in other investment areas have likely offset bond price gains.
From the article:
Pension officials and government leaders are left with vexing choices. As investors, they have to stash away more than they did before or pile into riskier bets in hedge funds, private equity or commodities. Countries, states and cities must decide whether to reduce benefits for existing workers, cut back public services or raise taxes to pay for the bulging obligations.
>>>Prior discussions and links here at MFO have indicated performance problems with many large pension funds. Perhaps that should have invested in something like VWINX and/or a simple 50/50 equity/bond mix with 4 holdings.
Educated, smart folks; who are not the sharpest tools in the investment world shed! Perhaps hire a few more hedge fund managers.......oh, wait; these managers are being fired by numerous funds!
10 year annualized returns sampler on the simple side of investment life:
--- IEF = 5.5%
--- TLT = 6.7%
--- LQD = 5.5%
--- TIP = 4.1% (even the lowly regarded TIP is far above this percentage using simple moving averages for buys and sells)
--- VTI = 7.1%
--- SPY = 6.8%
--- IWM = 6.7%
--- QQQ = 11.4%
--- VWINX = 6.7%
Pick any 4 of the above and one still finds an average of about 6.2% annualized over 10 years. Yes, I know; not much diworsifiers in the above choices. Build your own pension fund and post here, eh?
Problems with the future of many pension funds and survival are real. Problems with this also result from the skill set of much of the management(s).
Other than these, all is well with the world.
...etf ticker highlight test IEF QQQ
Take care,
Catch

"If you have a time horizon of 5 years or longer, you should actually hope for a rising rate environment. You’ll be better off for it in the end."
I think that would depend a lot on what kinds of bonds you own right now. If you own bonds with a relatively short maturities, rising rates could provide an opportunity to reinvest for greater investment income. If your bonds have very long term maturities, rising rates could mean (a) waiting a very long time to reinvest at higher interest rates, and/or (b) having to sell the long term bonds at a loss in order to reinvest at higher interest rates.
Nick de Peyster
http://undervaluedstocks.info/