Worried about your bond portfolio? Keep these 3 things in mind

Remember why you hold bonds in the first place.

A friend who’s close to retirement texted that she was concerned about the bond market. She’d been building out that fixed-income allocation over the past several years at the urging of her adviser.Her message made me wonder if some people might have misguided ideas about bonds.

Volatility is much lower than for stocks

For one thing, notwithstanding the recent headlines, bonds’ volatility is almost always going to be mild alongside the fluctuations that stocks experience. For example, on Sept. 1, 2026, a day when bonds grabbed the top headline on The Wall Street Journal’s website, total bond market index funds were down about half a percentage point. Returns for the year to date were just barely in the red. As the saying goes, “A bad year in the bond market is like a bad day in the stock market.”Of course, the 2022 bond rout is fresh in everyone’s minds: Amid the Federal Reserve’s seven interest rate increases that year, the typical intermediate-term bond fund shed about 13%, and long-term Treasury bonds dropped nearly 30%. But those were the worst bond market losses in history, exacerbated by the fact that starting yields were so low at the time of the sell-off. When bond yields go up, hurting prices of already-existing bonds with lower yields attached........

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