US Bond market is risky
This is second subject that came up during our discussion. Read First subject of discussion.
Appreciating US$ has attracted more money from all over the world to its fixed income market. This demand for US$ further strengthened the currency against all other currencies. [ Yen depreciation is their own making. ]
Bond yields are so low and it is very risky to invest in Bond funds in USA, especially in those with medium to long duration.
I suggest US bond fund holders should avoid all long term bonds/ bond funds. And selectively hold high quality medium term bonds for long term goals; For all short term goals, move the money to money market funds. Yes, you wont get any income from money market funds. But preservation of capital is important for short term goals. The risk outweigh the benefit of any low interest income from such holdings.
For example, if you are settled in India and moving money from your 401k/IRA regularly, any money you plan to convert over next 12 months and transfer to India should be in money market. Or you may use the recent INR depreciation and convert them to INR.