https://www.kiplinger.com/article/investing/T047-C032-S014-retirees-don-t-make-mistakes-before-a-correction.html
Retirees: Don’t Make the Same Mistakes Before a Market Correction
Take some lessons from the mistakes many retirees made during the downturn that socked stocks in 2008. By adjusting accordingly, you don't have to fear outliving your retirement portfolio, even if you're about to retire.

There has been a noticeable uptick in long bond yields recently and it continues today. With equities nearing all time highs and junk bonds at all time highs and investors all in on the negative rate scenario, I hope this blip up doesn’t become anything more - like 2% and more on the 10 year. Actually that might not be all bad and indicative of a much stronger economy than investors have priced in.

@Junkster
R
I'm not sure where they're still finding non-agency debt trading at 70 cents on the dollar of par value today. One of their major competitors, Angel Oak, at the end of 2018 said they were buying at 86 cents on the dollar: https://angeloakcapital.com/wp-content/uploads/2018/4Q/Seeking_to_Improve_Quality_While_Maintaining_Income_Whitepaper-web.pdf
Here's what Angel Oak says:

For example, the prime, Alt-A, and option ARM legacy NA RMBS we target at the top of the capital structure are still at deep discounts relative to par at approximately 86 cents on the dollar.

So if it's 70 cents, I assume it is probably lower credit quality, which could be fine so long as one is willing to accept the additional default risk. I see the distinction in your post is sub-prime so that must be it.
Update: OK, I see here for AlphaCentric's own data, the portfolio is at 75 cents on the dollar and the entire market they say is 81 cents on the dollar: alphacentricfunds.com/funds/IncomeOpp/presentation.pdf
Yet it is interesting--one word for it, scary is another--how far down the capital structure with regard to collateral and credit quality you have to go to get to such discounts now. See page 19 to look at their example of the debt tranches. I'm not saying this strategy won't work, but clearly there are risks here.

These subprime borrowers have now been in their homes 12 to 16 years and have built up equity instead of being upside down when the housing market cratered in 07/08. Dan Ivascyn mentioned in his recent interview how unlikely these borrowers would be to default now even if they their economic situation worsens. There may be another economic crisis but next time it may finally be the much ballyhooed corporate credit crisis. From my experience investors always want to relive the previous crisis not realizing they never immediately repeat. A classic example is the inflation crisis of the 70s. How many times have we heard since then another inflation crisis is just around the corner.

@davidrmoran. Thank you! "... if it ever adds $10k cagr graphing over easily adjustable time periods ..." Adding holdings data is next big improvement planned, then after that plotting!

@Junkster
I'm not sure where they're still finding non-agency debt trading at 70 cents on the dollar of par value today. One of their major competitors, Angel Oak, at the end of 2018 said they were buying at 86 cents on the dollar: https://angeloakcapital.com/wp-content/uploads/2018/4Q/Seeking_to_Improve_Quality_While_Maintaining_Income_Whitepaper-web.pdf
Here's what Angel Oak says:

For example, the prime, Alt-A, and option ARM legacy NA RMBS we target at the top of the capital structure are still at deep discounts relative to par at approximately 86 cents on the dollar.

So if it's 70 cents, I assume it is probably lower credit quality, which could be fine so long as one is willing to accept the additional default risk. I see the distinction in your post is sub-prime so that must be it.
Update: OK, I see here for AlphaCentric's own data, the portfolio is at 75 cents on the dollar and the entire market they say is 81 cents on the dollar: alphacentricfunds.com/funds/IncomeOpp/presentation.pdf
Yet it is interesting--one word for it, scary is another--how far down the capital structure with regard to collateral and credit quality you have to go to get to such discounts now. See page 19 to look at their example of the debt tranches. I'm not saying this strategy won't work, but clearly there are risks here.

FYI: Investing in the many municipal bonds that finance mundane things like the local sewage-treatment plant can often require more expertise than buying headline-grabbing hot stocks like Facebook or Amazon.com .
With more than 55,000 active muni issuers in the marketplace, John Miller, a co-manager of the Nuveen Strategic Municipal Opportunities fund (ticker: NSAOX), has plenty of work to do.
Regards,
Ted
https://www.barrons.com/articles/nuveen-municipal-bond-fund-digs-deep-for-value-51568237460?refsec=bonds
M* Snapshot NSAOX:
https://www.morningstar.com/funds/xnas/nsaox/quote
Lipper Snapshot NSAOX:
https://www.marketwatch.com/investing/fund/nsaox
NSAOX Is Unranked In The (MNL) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/muni-national-long/nuveen-strategic-municipal-opps-fd/nsaox

The ECB announced monetary policy this morning. Based upon what I think/see, is that having investments in IG bond funds should find a decent uptick in pricing (profit). Whether this holds for the day or the remainder of the week, I don't know, of course. I suspect that just when some folks think it is time to take big profits in the bond run from last year; that these changes come about and keep them scratching their heads.
The below link is for multiple stories, if you choose to view/read to help sort out this complex policy; which is a combo rate cut for some areas and QE into broad areas, including private sector corporate bond purchases (this is not new, but extended).
Catalog this continuing story of central banks and their actions under: Fun times in Bondland.
ECB rate decision
Note: POTUS had commented about the ECB policy. His tweet link is found a few comment boxes back in this thread.
Smile on.
Catch

Should interest rates pull back to where cash interest rates are paying next to nothing then I plan to reduce the amout of cash held within my portfolio from 20% to 15% and then raise my income area's allocation from 40% to 45%. Thus, I'll become a buyer of bonds because of the low yield environment for cash. My portfolio's equity allocation will remain at 40%.
With this, I'll reduce the amount held in my CD Ladder (cash area) and increase the amount held in my bonds funds (income area). This could take place, for me, as early as December when I have a CD maturing within my CD Ladder and continue until I have reached the desired target asset allocation for my portfolio. Currently, my CD Ladder accounts for about 10% of my overall portfolio's value, savings at about 5% with the residual being in demand cash.

PONAX has an expense ratio of 1.45% and a 3.75% load.

"The Federal Reserve should get our rates down to zero or less".............
POTUS tweet early this morning. Well, folks; this should boost your bond returns for a tiny bit, once it happens.

Wait a minute ... that would appear be a great time to refinance your home. With a negative rate mortgage, wouldn’t the bank have to start sending you monthly interest payments? What a deal.

Callable vs. noncallable. Isn't that the second thing you learn about bonds after finding out that they're loans?
If only the US could issue $1 trillion in bonds paying negative 3 percent, then we'd have $2 trillion in debt, but the net cost to service would be 3% x $1T - 3% x $1T = 0. Voila, problem solved. He just didn't demand a low enough interest rate to make it work.

FYI:
Regards,
Ted
https://www.cnbc.com/video/2019/09/11/cashin-once-you-go-negative-rates-it-becomes-alice-in-wonderland.html?&qsearchterm=Art Cashin

FYI: Our guest this week is Dan Ivascyn. Ivascyn is group chief investment officer of PIMCO, where he leads the firm's income, credit hedge fund, and mortgage opportunistic strategies and sits on its executive and investment committees. Ivascyn is perhaps best known as the longtime manager of PIMCO Income, where he's produced one of the best records of any bond manager since taking the helm in 2007. In 2013, Morningstar named Ivascyn as its Fixed-Income Fund Manager of the Year. Ivascyn has been in the investment business for nearly three decades. He joined PIMCO in 1998, following stints at Bear Stearns, T. Rowe Price, and Fidelity Investments.
Regards,
Ted
https://www.morningstar.com/articles/945312/dan-ivascyn-building-a-portfolio-to-bend-but-not-break

FYI: These highly rated mutual funds have a fondness for wide-moat stocks.
Regards,
Ted
https://www.morningstar.com/articles/945364/10-superb-defensive-stock-funds

PK tweet just now, and yes, the stupidity is most striking, and more important it is so from advisers:
Quite aside from his demand that the Fed adopt emergency stimulus measures when the unemployment rate is 3.7%, Trump's tirade included the idea that the US should "refinance our debt." Why is that a stupid, ignorant remark? 1/
The answer is that federal debt isn't like a mortgage you can prepay; it's bonds that promise a fixed yield until maturity. The government could issue new bonds and buy the old bonds back, but this wouldn't reduce interest payments at all ... 2/
.. because while there are outstanding bonds yielding more than current rates — say, 10-year bonds yielding 3 percent — those bonds sell at a premium. So buying back, say, $1 trillion in debt wld cost more than $1 trillion — enough more that the interest wld be the same 3/

@Charles, Safari has served me well over the years just as IE, Chrome and Firefox on the Windows OS. So far Portfolio tool has been very useful while in exploring less correlated asset classes and lowering the overall risk over time.
The Recovery time of each fund is another insightful parameter to consider during portfolio construction with respect to the drawdown. Vanguard Total International Stock Index has one of the longest recovery time - 114 months or 9.5 years after 2007 recession.
Once again, thank you for making this tool available to MFO Premium members. I look forward to the next phase of development.

"The Federal Reserve should get our rates down to zero or less".............

POTUS tweet early this morning.
Well, folks; this should boost your bond returns for a tiny bit, once it happens.

You are correct, PV has 2 choices monthly or yearly performance. This means the -0.87 is per one whole month.
I looked carefully (I hope) and that day last Nov was the worse one day decline in 3 years, I found several more days with -0.6 to -0.8%

Yes, that was by far it’s worst one day performance. That was during the period when both stocks and bonds were being pummeled by rising rates. The current rise in the 10 year Treasury has me a bit spooked although it hasn’t impacted IOFIX much or its cousin DPFNX at all. The later holds less subprime. I may lighten up on IOFIX albeit not drastically. Me lightening to any degree works well as a contrarian indicator.
@Charles, talked with Brian Loo yesterday. They still feel their holdings in their subprime non agency ( I don’t believe they hold any prime or alt-a non agency) has many more years of life left. Trading around 70 cents on the dollar. An ever shrinking asset class equals scarcity value.
A lot more we discussed but you can give us more details when you update your report after visiting with the other principals in the firm. Of course when speaking with any fund managers how often will you hear anything but a rosy forecast, IOFIX being a niche fund has some unique things going its way. That is unless there is some major collapse in home prices and all those subprime borrowers get upside down on their loans again and this time decide to walk away.
.

just go to M* and look at the cagr graph for a month
or fido; hoping this 1-month image is viewable by you
https://realtimebigchart.gtm.idmanagedsolutions.com/custom/fidelity-com/fidelity-research3.gifquote?symb=BIVRX&time=1mo&freq=1dy&size=1
anyway, fido thinks it's real and has logged the $ increase, so presumably if I were to bail out of it I would get that amount, a significant gain
have you ever shorted or dealt w shorting funds? this is quite what happens sometimes ... rarely ... almost never ... usually the opposite :(

All fund risk and return metrics, ratings, and analytics were uploaded this past Saturday, reflecting performance through August 2019.
Morningstar’s new fund family is off to just a so-so start from a performance perspective, but as an asset-gatherer, it’s off to a great start … $2.4B!
https://www.member.mfopremium.com/2019/09/10/mfo-ratings-updated-through-august-2019/