Looking back over the past 12 months or so you could call this the "Year of the Treasury." Not only has our U.S. Treasury been active in the bond markets, but Treasury bonds have been on a tear as investors have flocked to their super-safe government guarantees, ignoring a precipitous decline in yields as they opted for a return of capital versus a return on capital.

As such, there's seldom been as big a divide between yields on various types of bonds, or bond funds.

My preference is for corporate bonds over Treasurys because, among other things, when inflation does come back, Treasurys will get clipped while corporate bonds will weather that storm a whole lot better.

And, given where yields sit today, an investment in a fund like Short-Term Investment-Grade may prove to be one of the best fixed-income buys you can make. More here.

Obviously inflation is not a big deal today. March's Producer Price Index and Consumer Price Index reports showed, at best, a benign rise in some inflation components. But for now, I'd say you're safe worrying about other things and putting inflation on the back-burner for the moment.

Risk and Return in Bond Market Investing

Before talking about Vanguard's individual bond funds, I find that it's always helpful to review the risks and returns inherent in bond market investing because investors seem to understand the risks they take in stocks better than those taken in bonds.