@WABAC
If you are considering CEF munis hopefully you are aware that most are leveraged in the 38% range and if there is a bond downturn in the future these funds will really get zapped because of this. If you dig deep there are a few funds with minimal leverage. I cannot remember which ones they are as it has been several months since I researched them. I ended up with VWALX which I mentioned previously. It had the risk benefit ratio I could live with Good luck with your hunt.

That is good advice.
I don't move quickly. I keep an eye on costs, credit quality, and the company I buy products from.
The Closed End Fund Association has a nice screen for expense ratio, discount/premium, and leverage.
I can do a deeper dive on anything that interests me with the premium tools at mfopremium. But right now the lower cost general funds that interest me are selling at a small premium. The only muni for my state, NAZ, is leveraged up the wazoo and has an expense ratio to match.
VWALX is 12% of my muni-bond portfolio, and the only thing that isn't rated A or better.
I don't really like bonds much. So I'm not sure I want to add more to my taxable account that is primarily to be left to my children.
I am taking the income from the munis to supplement Social Security until we have to take RMD's. But I won't need that when the RMD's start.

https://www.marketwatch.com/story/how-fund-giant-vanguard-is-misleading-investors-about-a-proposed-tax-on-stock-trades-2020-01-16
Opinion: How fund giant Vanguard is misleading investors about a tax on stock trades
_financial-transaction tax would not harm Main Street investors, as Vanguard contends_
Be very careful out there and sometimes very helpful to read between fine prints

This post is about the use of Non-traditional bond oefs, as low risk alternatives in a conservative portfolio, compared to short term bond oefs. Typically short term bond oefs, are low risk options, because of their short duration, and their use of investment grade corporates, securitized assets, and cash and cash equivalents. Lower risk Non-traditional bond oefs, typically hold lower investment grade corporate and securitized assets, but will use a wider array of investing strategies, in an "unconstrained" manner, to produce "absolute return" to protect and grow principal. The M* definition of Non-traditional bond oefs is as follows:
"Morningstar Category: Nontraditional Bond":
"The Nontraditional Bond category contains funds that pursue strategies divergent in one or more ways from conventional practice in the broader bond-fund universe. Many funds in this group describe themselves as "absolute return" portfolios, which seek to avoid losses and produce returns uncorrelated with the overall bond market; they employ a variety of methods to achieve those aims. Another large subset are self-described "unconstrained" portfolios that have more flexibility to invest tactically across a wide swath of individual sectors, including high-yield and foreign debt, and typically with very large allocations. Funds in the latter group typically have broad freedom to manage interest-rate sensitivity, but attempt to tactically manage those exposures in order to minimize volatility. The category is also home to a subset of portfolios that attempt to minimize volatility by maintaining short or ultra-short duration portfolios, but explicitly court significant credit and foreign bond market risk in order to generate high returns. Funds within this category often will use credit default swaps and other fixed income derivatives to a significant level within their portfolios."
Four lower risk, non-traditional bond oefs, worthy of consideration as alternatives to short term bond oefs are as follows:
1. MWCRX/MWCIX: It has a standard deviation of 1.02, duration of 1.8, credit rating of BB, rated as Low Risk by M*, has total return of 1 and 3 yrs as 6.36/3.82. The bulk of this fund is investment grade assets, but does hold close to 20% in HY assets.
2. SEMPX/SEMMX: It has a standard deviation of .77, duration of 1.39, credit rating of B, M* risk of Low, has total return of 1 and 3 years as 5.28/5.09. The bulk of its assets are in lower grade securitized assets.
3. CUBAX/CUBIX: It has a standard deviation of 1.26, duration of .99, credit rating of BB, M* risk rating of Below Average, and its total return for 1 and 3 years as 6.25/3.33. The majority of its assets are investment grade but does hold almost 1/3 of its assets in HY, and its assets are in both corporate and securitized categories.
4. PMZAX/PMZIX: It has a standard deviation of 1.05, duration of 1.16, M* credit rating was not rated (typical of PIMCO), but M* risk is rated as Low, and its 1 year and 3 year total return is 5.36.4.06. The majority of its assets are in securitized assets.
Many will not consider anything other than investment grade short term bond oefs, but these non-traditional bond oef funds have performance tracks that are very smooth with upward trajectories, and they have held up very well in downmarket periods, and their total return is very good for a lower risk portfolio role.

Hi @Puddnhead,
Thanks for the shout out. I'm with the Dukester on both counts. The Blond One gets a pass and we move higher through price expansion ... but, not so much on earnings. I've got forward estimates about 176 to 177 for the S&P 500 Index as I write. That puts the Forward Price/Earnings Ratio just short of 19. I've got TTM Earnings at 141. That puts the TTM Price/Earings Ratio at 23.6. Blend the two together and that produces a Blended Price/Earnings Ratio of 21.3%. My thinking is that from a blended perspective 20 is plenty. At least that is the way I govern. And, furthermore, Old_Skeet's stock market barometer closed the week with a reading of 127 indicating that stocks as measured by the metrics of the barometer, for the S&P 500 Index, are extremely overbought.
So, what is fair value for the Index? By Old_Skeet's price to earnings mythology 3180 (now about 5% overvalued). With most of the feeds within the barometer at (or towards) their ceiling that computes to extremely overbought. For me, I'm liking my global growth sleeve as it offers better oportunity with a Forward P/E multiple of 20.8 as comparied to my large mid cap sleeve which has a Forward P/E multiple of 24.2. Both of these sleeves are found in the growth area of my portfolio.
For me, though, better value is found in the growth & income area of my portfolio with my domestic equity sleeve having a Forward P/E Ratio of 14.3 while my global equity sleeve is a little higher at 16.5.
With this, stocks in general are expensive ... and, I'm looking for my value plays, found in the growth & income area, to do more of the heavy lifting as we move through the year.
And ... also remember, most times ... as we move through the year forward estimates usually get trimmed downward.
So what am I to do? With equities having the strong run that they have had of late I've been buying fixed income for more than one reason. The first one is to keep my asset allocation balanced and from becoming equity heavy. And, the second one is because as stocks pullback (during a downdraft) fixed income usually increases in value as some investors sell stocks and move into bonds pushing bond prices higher and their yields lower.
So ... instead of just pondering ... you've now read what Old_Skeet has been doing and why due to elevated stock prices. Thus far, I have not recently been a seller of equities; but, I have been a buyer of fixed income to maintain my asset allocation.
Have a good one ... and, I wish all "Good Investing."
Old_Skeet

Can someone explain why High Yield / Floating are kinda being lumped together above. I'm reading high yield not good place to be but what about floating rate?
Asking because have some of my MIL's money in PRFRX and I viewed it as conservative investment.

I'm quoting from the article the whole narrative "(2) High Yield / Floating Rate: Also called the non-investment grade bond market, high yield or junk bonds, the area of the market performed well in 2019. However, one has to remember where they started. Going into the fourth quarter of 2018, bond spreads were tight, equating with little return for the risk assumed. When the bear market/correction of Q4 2018 occurred, spreads blew out as investors sold out and ran to the safety of Treasuries and cash. As noted above, spreads were well above 500 bps. Today, they are down to ~350 bps which are very tight levels. At these levels, we would say investors in high yield are coupon clippers, meaning that you are likely to receive the yield only with little to no capital gains. The risk is to the downside."
HY correlate to stocks more than other bond categories. If stocks correct then HY probably will too.
Floating rate(=Bank Loans) are still junk bond with very short duration but they might go down too just as they did in Q4 of 2018, see (chart)
Usually, bank loans do better than most other bond categories when rates go up rapidly but rates are not expected to go up rapidly soon. I use BL funds as a trade when I'm convinced rates will go up and why I prefer to use mostly Multisector bond fund see 3 year (chart).
For conservative bond funds I prefer SEMMX,IISIX over PRFRX. See 5 year (chart) and how PRFRX was down much more than these 2 funds in the second half of 2015 and Q4 2018.

An average for an entire period is not every year in that period.

No it's not. On the other hand, I can't predict when international might rise to the top, or crash to the bottom. I don't have forever to give it an equal weighting to some other categories in my IRA like small, mid, large, REITs, utilities, health, and consumer staples; in the hopes that something might change. Most of my fund managers have the freedom to fish in foreign waters if they see fit.
Commodities out-performed in some of those years too. And I might add a small stake given their depressed price. But a lot would have to change before they became a large and concentrated feature of my IRA portfolio. The same would have to happen with foreign equity.
I have had Vanguard International Growth bubbling along since 1992 in my taxable account. So if foreign goes on anything resembling a sustained surge I would do just fine.

You both were stating you were waiting 20 to 40 years for international and emerging markets to outperform. Some of those years in the last 20 to 40 you would’ve strongly outperformed in international and emerging.

You win Lewis.

Also this:

@WABAC @VintageFreak Fundamentally inaccurate:

There was a thread not that long ago linking a paper that claimed M* understated credit risks of bond fund holdings. M* and the authors had some back and forth.
That MFO thread wound up in the bullpen. Here's a M* discussion community thread on the paper.
One fact I got out of the paper was that M* treats nonrated bonds as junk. In contrast, funds themselves use their internal ratings for those bonds when calculating average credit quality. So while M* doesn't even give a style box value for this fund, if it did the credit rating would be low quality (junk), regardless of whether that made sense for the unrated portfolio.
You are correct that M* equates risk with volatility (giving more weight to downside volatility) and disregards the underlying portfolio. Its rationale, according to its methodology, is that such attributes are implicitly accounted for when it classifies the fund:

A style profile may be considered a summary of a fund’s risk-factor exposures. Fund categories define groups of funds whose members are similar enough in their risk-factor exposures that return comparisons between them are useful.

That's certainly suspect with junk munis. My "classic" example is BCHYX, a California junk bond fund that M* lumps together with California longs.
This is more than a random example. M* classifies HICOX as a single state intermediate muni. The manager describes its peers as being "in the High Yield Municipal Debt Fund category." (Annual statement).
Most people seem to take "risk" (really volatility) adjusted returns at face value. You're going further - questioning not only whether volatility is a good metric for risk, but why aren't obvious risk attributes like credit quality explicitly incorporated? Good question!
Just looking superficially at the fund, I can offer a good news/bad news reason for buying/not buying it. It's been managed by the same manager for three decades. One's got to figure that if it hasn't had a major blowup in that period of time (I haven't checked), then he knows what he's doing with all these bonds. (Though as you point out, they're very narrowly focused and the landscape may be changing.)
But any fund, not just this one, with a single manager for that period of time has significant management risk, especially when virtually its whole portfolio consists of unrated securities. In the Annual Statement, he describes himself as "new to Medicare", i.e. mid-to-late 60s.
Since you asked about pricing, see Note 2 in the Annual Statement. It's pretty much boilerplate but goes to describe how bonds are priced. The fund has no level 1 bonds, meaning bonds that trade frequently (so that you can quote the market price directly). Most of the bonds are level 2, meaning that while these particular bonds may not be trading frequently, there are enough "comps" to get a good estimate. Level 3 is divining prices from unobservable data.
"Securities for which there is no last sales price are valued by an independent pricing service based on evaluated prices which considers such factors as transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities, or are fair valued by management. "

January 17th

January 10th

Segment 1:

Segemnt 2:

Segment 3?
little help linking if you find it...thanks

Comparing VFINX to DODFX was an error, it should be VFINX vs DODGX. The link and numbers are based on DODGX. SP500 beat DODGX.
I also agree that low fees are important and if I have to select funds for the next 20 years I would only select index funds. FXAIX ER(expense ratio)=0.015 and Fidelity also introduced zero ER. This means DODGX ER is still 0.5% higher.
The only exception is VWIAX which is a great fund for retirees with ER=0.16%.
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DODGX doesn't only own "value" companies. They own growth companies too. If you can't beat the index claim your style is a bit different.
I always believed in investing in the index for US LC(The Bogle way). If I want to beat it I would use QQQ, after all, for several decades now high tech is where you find a lot of growth and where the biggest ones take so much more. I also prefer QQQ (for my explore part) because over 50% of the revenues come from abroad.
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Risk isn't volatility. That subject had been discussed for decades but Risk doesn't have an accurate definition. Volatility, Sharpe, Sortino, Martin, Ulcer, Up/Down ratio and others can help you find better funds. Sure, they are not perfect or a guarantee but you got to start somewhere. I have been using them now for about 20 years. I have used SGENX, FAIRX, OAKBX most years in 2000-2010. As I got older and prepare for my retirement I have used PIMIX and PRWCX several years since 2010.
I also found that low SD + higher performance is a quick search with a high correlation for finding great funds and great funds also have better Martin, Sharpe, Sortino. They all work together most times.
MFO also uses the above for finding better funds.
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As a retiree bond funds are more important to me. Stocks are "easy" just use an index. Bonds is where great managers can make more money with better risk attributes. You will never find bond funds like PIMIX,PIGIX and IOFIX at D&C and you definitely will not find much higher distributions which are very important to most retirees.
It also works better for covering expenses and rebalancing.
When stocks go up a retiree should use stocks for expenses when stocks go down use bonds for expenses and rebalancing should be a part of it.
My style was always to invest in my best ideas in order to try and get better results if you own 3 funds in every category chances are you won't.

I enjoyed the reads... very thorough, simple investment advice.
Keep it simple. DCA into VBINX...move on to other things...check back in 40 years.
7-rules-for-a-wealthy-retirement

The equally weighted oef that I like that is comprised of the top 100 US companies is VYCAX (Corporate Leaders 100 Fund). I have owned this fund off and on over the past ten years, or so, and have at times used it as one of my spiff (special investment) positions. One of the reasons I like this fund is that it usually has a good distribution yield. Last year its distribution yield was 9.3% which includes capital gain distributions. Although, it is an equity fund I consider it an income generating fund as well. Not only will it grow your principal through the years it will put some spiff in your poscket if you take all distributions in cash as I do.
Another equally weighted oef that I have used in the past as a spiff position is VADAX (Equally Weighted S&P 500 Fund). It has had some good distribution payouts as well; but, generally, lower than what VYCAX produces.

DoubleLine has an international Shiller/CAPE strategy that may be of interest to value investors. The tickers are DLEUX/DSEUX.
dinky linky

Maintain a core portfolio of debt instruments that focuses on global fixed income rotation while simultaneously obtaining exposure to the European Equity sector rotation strategy via The Shiller Barclays CAPE® Europe Sector Net TR USD Index. The Index aims to identify undervalued sectors based on a modified CAPE® Ratio, and then uses a momentum factor to seek to mitigate the effects of potential value traps. By using both a value indicator and a momentum indicator, the Index aims to provide more stable and improved risk adjusted returns. The CAPE® Ratio is used to assess equity markets valuations and averages ten years of reported earnings to account for earnings and market cycles. European sectors are equal-weighted notional long exposure to four European sectors that are undervalued. Each European sector is represented by a sector index. Each month, the Index ranks ten European sectors based on a modified CAPE® Ratio (a “value” factor) and a twelve-month price momentum factor (a “momentum” factor). The Index selects the five European sectors with the lowest modified CAPE® Ratio — the sectors that are the most undervalued according to the CAPE® Ratio. Only four of these five undervalued sectors, however, end up in the Index for a given month, as the sector with the worst 12-month price momentum among the five selected sectors is eliminated. The sectors are typically comprised of issuers represented in the MSCI Europe Index, which captures large and mid cap stocks across 15 developed market countries in Europe.

"As I said earlier, D&C is a good shop but I was always able to find better risk/reward funds than D&C."
That is figuratively and literally your bottom line. Though what you're looking at is volatility, not risk. SD is a measure of volatility. Sharpe ratio is a ratio of return to volatility (SD). Sortino ratio "measures the return to 'bad' volatility." Then there's the Treynor ratio, " known as the 'reward-to-volatility ratio'".
Sortino: https://www.morningstar.com/InvGlossary/sortino_ratio_definition_what_is.aspx
Treynor: https://www.morningstar.com/articles/384148/article
Sure, look at all of these measures, and more. Just realize that they're all variations on the same theme - equating volatility with risk. When cash flow is a concern, volatility does create risk. But you dismissed that.
DODFX vs VFINX? Yes, foreign investments have done worse than domestic for the past ten years. I'll guess that was a typo and that you meant to write DODGX.
Recognizing that DODGX is a value fund, value has likewise underperformed for the past ten years (link). The comparison says more about the relative performances of the market segments than the funds. Still, since you did mention mean regression, it might be helpful to look at a quote from an article praised in another thread:

Value stocks may finally do better than growth stocks thanks to the steeper yield curve. The thesis of owning growth stocks during a flattening yield curve and value stocks during steepening could prove true here.

https://www.nytimes.com/2020/01/17/business/stock-market-index-equal-weight.html
Now, Try Slicing the Stock Market Into Equal Pieces
_
Index fund investing is already immensely popular. But is it time to consider funds that construct indexes differently?
Equal-weighted funds tend to be “more expensive, smaller in size and trade less frequently than the cap-weighted alternatives,” he said. The diversification they provide outweighs those drawbacks, in his view, “but they are things for investors to keep in mind.”
_

“ There is one particular poster, John, who introduces about 4 or 5 or more new threads every day, that goes straight to the beginning of the Discussion section.”
That’s the way it’s supposed to work. The most recent new threads go to the top. Most who post here have a broadspread appreciation of many different facets of investing. We’ve never felt a need to compartmentalize. What you might be missing, however, is the “Discussions +” link which appears to the left side of the screen when you’re logged in. By clicking on that you can view just the threads which have received comments by others. (If you login using that saved link, it will take you directly there.) That’s the link I generally use - though it’s helpful occasionally to scan all of the threads, whether commented on yet or not. Also, you can easily bump to the top of the stack any thread farther down that you want to promote by making brief comment in that thread,
As you must be aware, we recently lost Ted Didesch “the Linkster” who for many years posted dozens of helpful links virtually every day. We all miss Ted. John it seems is trying to help compensate for that loss with some fresh threads every day. I’ll criticize his formatting or choice of topics occasionally (fair game), but I would never disparage what he’s attempting to do for the rest of us. The simple answer to “not liking” the topics that are posted is to post a few of your own.
We have (or have had in the past) some excellent posters here who also post on M* or other forums. No need for exclusivity that I’m aware of. Hopefully everyone can find a forum somewhere that they enjoy and benefit from. The Discussion board here is but a “side show” to all that MFO has to offer investors. David’s monthly commentaries are top notch - required reading IMHO for mutual fund investors: https://www.mutualfundobserver.com/2020/01/january-1-2020/ And it doesn’t stop with David. There’s over a half dozen knowledgeable / experienced investors who contribute to that publication every month, including Ed Studzinsky, former manager of OAKBX, whom I particularly enjoy reading. The research tools available here to those who want to dig deeper into funds are of high repute as well.
Best wishes @dtconroe to you wherever you eventually decide to land.

Regarding your comments, that it is better to post multiple more specific threads, as opposed to one larger thread, that is more encompassing, I found the posters on M* had varying opinions. However, it seemed that at M*, the larger and more encompassing thread, became almost a separate category of the Bond Investing Forum. I found posters quickly going to the larger thread, to see the latest discussions, as opposed to hunting down multiple more specific threads, that often disappeared for lack of interest, much more quickly.

Theoretically there is a topical limit on your post about conservative bond fund investments. Is it a good idea to drag it off topic with subjects that might die for lack of interest if they were in the cruel world on their own?
Well. There are no thread police here. And it is your thread. ;-)
I think the chances of the forum breaking down into sub-categories are nearly non-existent. The community has been operating this way since 1996. You might get an interesting explanation if you asked why.
I share your opinion about spamming the board with clickbait links. The locals seem to regard it as eccentric, but harmless. So . . .