I want to add to our Income Portfolio with two new recommendations, both of which are exchange-traded funds (ETFs) tied to the bond market, advises Jim Woods, editor of Successful Investing.

I recommend buying a position in the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and the iShares National Muni Bond ETF (MUB).

LQD is the investment-grade corporate bond fund, and it holds the highest-quality corporate bonds in the market today.

Bonds are from companies such as GE Capital Funding, CVS, Goldman Sachs, Verizon and AbbVie just to name the top five. LQD offers a yield of 3.17% and charges a very modest expense ratio of 0.15%.

MUB is the municipal bond ETF, with a variety of holdings in various municipal bonds issued by government agencies, states, counties and state universities to name just a few. MUB offers a 2.34% yield and charges a miniscule expense ratio of 0.07%.

The key to both of these ETFs, and the main reason we are adding them to the Income Portfolio, is because of the Federal Reserve — which has given us a glimmer of "income" light.

The Fed basically said it would buy anything and everything when it comes to bonds, and not only Treasury bonds, but also municipal bonds and corporate bonds (and with literally unlimited amounts of money, because that’s what the Fed can do).

The Fed’s massive move into markets over the past couple of weeks is what most professional investors wanted, and it’s one of the reasons why we have seen a nice rebound. And now that the Fed has provided a backstop for muni bonds and corporate bonds, now is the time to embrace the old Wall Street maxim, “Don’t fight the Fed.”

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