"We've had some good luck recently in the bond arena; now I've found another trading opportunity: Templeton Global Income Fund (GIM), a global government bond fund that yields 5.6%," says growth and income expert Richard Band.

The editor of Profitable Investing explains, "The fund is run by one of the finest international bond managers, Dr. Michael Hasenstab. Plus, I think we're in for a nice capital gain as the dollar settles down from its torrid run against most foreign currencies.

"Over the past decade, this closed-end fund has rolled up a sizzling total return of 235% at net asset value (through mid-June). Meanwhile, the S&P 500 stock index has lost 11%, even with reinvested dividends.

"Our Global Quant Portfolio (which delivered a 41% gain in 2009, is designed to be long-only and global; the portfolio is best suited for investors with a minimum time horizon of 10 years," says Jim Lowell.

The editor of Fidelity Investor explains, "The portfolio is made up of 10 funds; 6 domestic equity managers, 3 international equity managers and one top-rated sector manager. Here, we review one fund from each group.

"Our quantitative methodology follows a stringent framework of input and output; in this case, our purely quantitative manager ranking system is the core decision maker of who is and is not included this portfolio.

Despite this week's equity rally, investors are nervous about the future. They still fear a double dip. For that reason they are running to pour funds into money markets.

EPFR Global, which tracks the flows of money market funds, reported that money market funds had their greatest inflows in 18 months, some $33.5 billion.

Some of the world's biggest fund managers are now holding up to 40% cash in their portfolios. The main driver behind the flow of funds into money markets is fear, fear of another market slide. Chris Tuffy of Credit Suisse said: "This is about capital preservation."

"I'm now spotting an opportunity with Templeton Global Income Fund (GIM) -- a closed end fund that is run by one of the finest international bond managers, Dr. Michael Hasenstab," says Richard Band.

(Incidentally, Richard Band has just earned his own accolades; his Profitable Investing advisory was just named the nation's #1 financial newsletter for editorial excellent for 2010 by SIPA, the newsletter industry trade association.)

Band continues, "In recent months, as we all know, fears of a pan-European sovereign-debt crisis have knocked down the euro.

"What many investors don't realize, though, is that the panicky selling has also spilled over into the Asian currencies. They've fallen against the dollar, even though most Asian countries remain on a rock-solid financial footing.

Janus Flexible Bond (JAFIX) is a so-called multi-sector bond fund whose consistently good year-to-year performance has resulted in a sterling long-term record," says fund expert Mark Salzinger.

The editor of the No-Load Fund Investor explains, "For all of 2008 and 2009, Flexible Bond produced a cumulative total return of 18.9%, vs. only 6.9% for the multi-sector funds tracked by Morningstar. Over the past five years, Flexible Income's annualized return of 6.6% places it among the top 7% of all the fixed-income funds we cover.

"Over the past two years, the fund was the 10th best performer of every fund we track. In 2008, when most funds with significant holdings of corporate bonds produced major losses, Flexible Bond produced a gain of 5.6%.

"Residential real estate is still struggling, and the worst may still lie ahead for commercial properties; but one type of real estate has stayed well shielded from market forces in the last several years," says Stephen Leeb.

The editor of Income Performance Letter explains, "Aging Americans cannot easily delay seeking necessary medical and living-assistance care, regardless of the economy. So we now recommend Health Care REIT (HCN), a real estate investment trust has some 600 properties that focus primarily on senior housing and health-care properties.

If you are considering putting more of your money into bonds, you are not alone.

Putting his money where his mouth is, famous Pimco bond manager Bill Gross just invested $7 million in three of his own funds.

Gross recently bought a total of 1.1 million shares in the Pimco Corporate Opportunity Fund (PTY), the Pimco Income Strategy Fund (PFL) and the Pimco Income Strategy Fund II (PFN).

So what do these funds invest in?

"Not often discussed, all bonds have at least some interest-rate risk. And by and large, a bond or bond fund's risk is adequately measured by its stated 'duration'," says fund specialist Jim Lowell.

The editor of Fidelity Investor explains, "Even risk-free Treasury bonds do have market risk: they may not have any risk of default, but their prices are bid lower whenever interest rates are rising. In fact, the biggest risk to most types of bonds comes from higher interest rates.

"Interest rate risk hasn't been much of a concern since the end of the last rate hike binge back in 2006. However, it's the things we've forgotten to be concerned about which can bring the greatest downside surprises. There is now certainly a lot more room for rates to go up than for rates to go down.

"You're probably having a tough time these days if you live off the interest from your investment portfolio; money market accounts are now yielding a paltry 0.76%," observes fund specialist Ron Rowland.

The contributing editor to Money and Markets explains, "There is no big mystery why this is happening ... Ever since the banking system started blowing up back in 2008, Ben Bernanke and his Federal Reserve have kept short-term interest rates at historic lows. That's great for bankers, terrible for savers.

"Many investors are watching their income slide. These low rates have income-investors looking for new sources of steady interest and dividends. The alternatives are few. And I'm concerned that some people are so desperate that they're risking their principal in ways they don't even realize!

"The Canadian economy has rebounded from global recession faster than the U.S. economy, owing to its substantial natural-resource reserves, relatively stronger banks and milder and faster-recovering unemployment," says fund expert Mark Salzinger.

The editor of The ETF Report explains, "We are adding iShares MSCI Canada (EWC) to our ETF Foreign Picks speculative grouping this month, and detail that nation's strong economic and market fundamentals below.

"Canada's economy is expected to see faster real GDP growth in 2010 compared to most developed nations, including the U.S., Western Europe and Japan.

"With the recent run-up in the market, quality double-digit yield opportunities are few and far between. So I was pleasantly surprised when I came across Evergreen Global Dividend Opportunities (EOD)," says Amy Calistri, an income advisor who focuses building and maintaining a monthly dividend portfolio.

In her The Daily Paycheck, she explains, "I'd been looking for a solid income producer more heavily slanted toward equities. Bill Gross, PIMCO founder and recognized bond expert, believes stocks may outperform bonds in the foreseeable future. I'm inclined to agree with him.

"Technology is an attractive sector in which to invest in the current environment; though the sector is diverse in terms of investment characteristics, it generally offers superior growth opportunities and financial strength as compared with the overall market," says fund expert Mark Salzinger.

The editor of No-Load Fund Investor explains, "Over time, we have become more impressed with Baron iOpportunity (BIOPX), a multi-cap, no-load fund focused on technology stocks. The fund gained 61.8% in 2009, vs. 43.9% for the NASDAQ Composite."

"The Arbitrage Fund (ARBFX) invests in mergers and acquisitions by purchasing the acquired company's stock and typically shorting the acquirer; this strategy yields the 'spread' if and when the deal closes," reports Ian Wyatt.

The editor of The Recovery Letter, explains, "Fund manager John Orrico and his team avoid deals with low probability of closing by following a robust, time-tested model that eliminates hostile takeovers, deals that need to jump regulatory hurdles, and those requiring financing that might be difficult to obtain.

A common method for paying dividends from funds that invest outside the U.S. is to pay special dividends composed of short-term and long-term capital gains. The dividend policies of such funds are predicated on the ability of the fund manger to pay out whatever gains can be garnered over the course of a year depending on short-term or long-term holding periods.

Closed-end funds based on China, India and other emerging markets had explosive returns from 2003 to 2007, chalking up greater than 50% returns. But a large portion of those returns were paid out in the form of huge capital gains-based dividends and are reflected in most screening software portals that suggest these funds are still paying out these gorilla-sized dividend yields.

They're not, and the data can be hugely misleading when investors are hunting for big yields through various screening tools.

All common stocks, income trusts, master limited partnerships, REITS and other pass-through entities have what is called a payout ratio. It's a number that essentially says how much of the dividend is paid out from each dollar of net income.

A company like AT&T (T) has a payout ratio of 77%, meaning that the company retains 23 cents of every dollar after dividends are paid out to put back into the business. This is a decent ratio, but something around 50% to 60% is more ideal.