The outlook for the bond market is bleak. With the benchmark 10-year Treasury yielding a paltry 2.36%, it's simply not worth the risk to own it. Should its yield rise just one percentage point, the price would fall about 9%.

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With central banks around the world beginning to nudge interest rates higher, and inflation starting to return to normal levels, bond yields, in my view, will rise from here--not dramatically in 2018, but enough so that you should keep your maturities relatively short. What's more, because short-term rates have been on the upswing while longer-term rates have barely budged, the extra yield you get for buying a long-maturity bond has diminished markedly.

In a world of low bond yields, it's terribly tempting--especially for income-hungry retirees--to reach for higher yields in bonds issued by financially troubled companies. I think that's a bad idea.

The main purpose of owning bond funds today, in my view, isn't to earn high income. Instead, it's to provide ballast to your overall investment portfolio. Bonds reduce your overall volatility.

If you're in retirement and supporting yourself partly by cashing in securities periodically, my advice is to sell bond funds to meet your expenses, especially if (when) stocks go into a bear market. Other investors may want to sell bond funds during a stock market sell-off to buy more stocks at attractive prices.

Below are my favorite bond funds, from least to most risky.

It's hard to get more conservative than Vanguard Short-Term Investment Grade Investor (symbol VFSTX). A member of the Kiplinger 25, the list of our favorite no-load funds, it invests in corporate bonds rated BBB or better by Standard & Poor's. It also holds about 16% in Treasuries and about the same percentage in commercial mortgages and other asset-backed securities. The fund's duration is just 2.6 years. Duration tells you how much a bond fund should drop in price if its yield rises by one percentage point--so with this fund, you'd expect to lose roughly 2.6% if rates were to rise one percentage point. The fund yields 2.1%; expenses are 0.20% annually. The admiral shares (VFSUX) have a higher minimum ($50,000, compared with $3,000 for the investor shares), but they charge only 0.10% and yield 2.2%.

The fund's tax-free sibling, Vanguard Limited-Term Tax-Exempt (VMLTX), invests in municipal bonds rated BBB and above. Duration is 2.6 years, annual expenses are 0.19%, and the fund yields 1.5%. The admiral shares (VMLUX) charge 0.09% and yield 1.6%. Be realistic: Don't expect either of the Vanguard funds to return more than 1% or 2% annually anytime soon. On the other hand, I doubt either fund will lose more than 1% or 2% when bonds sell off.

If you're willing to take a bit more risk, consider Jeffrey Gundlach's DoubleLine Total Return N (DLTNX), also a member of the Kip 25. The fund firm's name comes from Gundlach's longtime practice of dividing the fund's assets between safer investments (mainly government-backed issues) and riskier securities (mostly private mortgages, which have some risk of default). If the economy strengthens, the riskier assets will do better. If the economy weakens, the safer fare will rise in price. Duration is 3.7 years, the fund yields 3.2%, and expenses are 0.73%.

Pimco Income D (PONDX), another Kip 25 fund, is riskier still--quite a bit riskier. But Pimco has proved to be one of the best bond managers in the U.S. It may even be better since the stormy departure of former star manager Bill Gross in 2014, after 43 years at Pimco. The fund, run by Dan Ivascyn and Alfred Murata, invests in a mix of high-yielding "junk" bonds, investment-grade corporates, emerging-markets debt and private mortgages.

The fund yields 3.4%, and its duration is just 2.2 years. Expenses are high, at 0.93%. I like this fund a lot, but it fishes in some risky waters. So don't bet the house on Pimco Income--especially if you're near or in retirement.

Steven Goldberg is an investment adviser in the Washington, D.C., area.

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