Two bond funds in my 401K are VBTIX and PTTRX. They both have performed well the last 5 yrs. plus you get a monthly dividend.
PTTRX did bad the past 6 mos., but Gross has changed his strategy and this past month has done very well. Don't forget he invests in other countries too. VBTiX did well too, but usually PTTRX does better. BUT, VBTIX has a lower cost rate.
IMO, I really don't think the mkt. will hurt the bond funds for at least another year. Everyone says the mkt will be choppy next year and I believe it because of Europe and China.
When the mkt finally does stabilize, maybe a balanced fund like FBALX or the Wellsley fund someone else mentioned.
I was listening to a Fidelity webinar and the speaker was saying he believes Europe will be the next Japan. He doesn't see how Greece can pay off the huge debt they have. If that is the case, it will definately take a while for the mkt to correct. I just read Gross' last newsletter and he sees a slow correction too.