2) Stick with short to intermediate maturities
Over the past 20 years or so, long-term bond funds have provided the highest returns. But it's not a given that that will always be the case. What's more, long-term bond funds can be surprisingly volatile. If interest rates rise just one percentage point, a long-term bond fund can drop 10 percent or more, wiping out more than a year's interest. That may be fine if you're a long-term investor and you don't mind such setbacks.

But if you're investing for shorter periods -- 10 years or less -- or if you're using bond funds to add some ballast to a predominantly stock portfolio, then you're better off with bond funds with short- to intermediate-term maturities -- say, five to 10 years. You can typically get 75 to 80 percent of the return of long-term funds, while incurring roughly 40 percent less volatility.

3) Beware tempting yields
Fund companies know that investors home in on yields. So some do everything they can short of putting the fund on steroids to pump up yields. They may throw some low-grade bonds into a government portfolio, or even throw in foreign bonds from countries where rates are especially high.

These ploys to boost interest may or may not pay off, but they all involve risks that are difficult to evaluate. If you see a bond fund that's touting much higher yields than funds with similar maturities and the fund doesn't have ultra-low expenses, then move on.