I just don't get the wisdom of investing in bond funds.

[Robbb]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

[collie1228]

I have never understood bond funds. If I buy the bond and keep it to maturity, I get 100% the interest and all of my principal back at the back end (although rarely there could be a default). Bond funds don't do that.

[Caymus]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

Do the Bond Fund results assume that the interest is reinvested?

[Caymus]

I have never understood bond funds. If I buy the bond and keep it to maturity, I get 100% the interest and all of my principal back at the back end (although rarely there could be a default). Bond funds don't do that.

Keep in mind that the returned principal would effectively be worth less if you bought the bond at 1% and it matures when rates are 5%.

[Robbb]

Do the Bond Fund results assume that the interest is reinvested?

Yes bond fund returns are calculated based on all interest, and dividends if there are any, are reinvested and not withdrawn.

[Topspinmo]

It’s all scheme.

[tophcfa]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

Hindsight is always 20/20. With any asset class you can find a historical time period that looks unusually good or bad. The last 15 years has been horrendous for bonds. The housing market crash of 2007/8, driven primarily by subprime mortgages, resulted in interest rates close to zero, and the Federal Reserve irresponsibly choose to keep rates artificially low for many years beyond the crisis. That was followed by a rapid increase in rates the last couple of years driven by hyperinflation. A perfect storm for bonds. A bonds return is driven by its yield as well as price changes. When interest rates go up, a bonds price declines and vice versa. When rates are close to zero, a bonds yield leaves little cushion to absorb losses due to price changes. Furthermore, when rates are close to zero, interest rates have little room to decline but lots of room to increase.

The difference between a bond fund and owning a single bond and holding it until maturity are very different. When you buy and hold a bond (assuming it doesn’t default or get called) your return is locked in, you earn the interest for the life of the bond and get your principal back at maturity. A bond fund’s return is very different, the fund never matures. Instead the fund is managed to constantly have a duration (for simplicity, duration is similar to maturity) within a tight range as outlined in the funds prospectus. The fund’s return is measured by total return, which changes daily. The main components of total return are both the funds yield and the underlying price of every bond held by the fund. Every day the funds holdings are “marked to market” based on changes in interest rates and perceived risk (credit and call risk) of the fund’s holdings. In general (credit and call risk aside), a bond fund’s expectation is not good when interest rates are unusually low, and are very good when rates are unusually high.

Lastly, no asset class should be looked at in a vacuum. Every asset class should be viewed in the context of a component of a diversified portfolio. Portfolios should be constructed with both returns and risk considerations. That requires looking at the correlations between various asset classes and the goals and objectives of the portfolio. In that context, bonds can be a valuable addition to a portfolio in the correct circumstances.

[retiredguy123]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.
Your numbers are not correct. My traditional IRA has been totally invested in two bond funds, The Vanguard Total Bond Market Index Fund and the Vanguard Short Term Bond Index Fund. I retired in 2007, and I have not touched (added money or withdrew money) my IRA until last year when I started taking my RMD. From January 1, 2010 to January 1, 2022, my IRA has increased in value by 43 percent. I think you need to recalculate your numbers. Yes, the stock market will usually produce higher returns, but I already have 40 percent of my investments in the Vanguard S&P 500 Stock Index Fund. I believe in having a diversified portfolio.

[Robbb]

Your numbers are not correct. My traditional IRA has been totally invested in two bond funds, The Vanguard Total Bond Market Index Fund and the Vanguard Short Term Bond Index Fund. I retired in 2007, and I have not touched (added money or withdrew money) my IRA until last year when I started taking my RMD. From January 1, 2010 to January 1, 2022, my IRA has increased in value by 43 percent. I think you need to recalculate your numbers. Yes, the stock market will usually produce higher returns, but I already have 40 percent of my investments in the Vanguard S&P 500 Stock Index Fund. I believe in having a diversified portfolio.

On May 1st 2007 BND closed at $74.77, on November 10th 2023 BND closed at $69.68

[Robbb]

Hindsight is always 20/20. With any asset class you can find a historical time period that looks unusually good or bad. The last 15 years has been horrendous for bonds. The housing market crash of 2007/8, driven primarily by subprime mortgages, resulted in interest rates close to zero, and the Federal Reserve irresponsibly choose to keep rates artificially low for many years beyond the crisis. That was followed by a rapid increase in rates the last couple of years driven by hyperinflation. A perfect storm for bonds. A bonds return is driven by its yield as well as price changes. When interest rates go up, a bonds price declines and vice versa. When rates are close to zero, a bonds yield leaves little cushion to absorb losses due to price changes. Furthermore, when rates are close to zero, interest rates have little room to decline but lots of room to increase.

The difference between a bond fund and owning a single bond and holding it until maturity are very different. When you buy and hold a bond (assuming it doesn’t default or get called) your return is locked in, you earn the interest for the life of the bond and get your principal back at maturity. A bond fund’s return is very different, the fund never matures. Instead the fund is managed to constantly have a duration (for simplicity, duration is similar to maturity) within a tight range as outlined in the funds prospectus. The fund’s return is measured by total return, which changes daily. The main components of total return are both the funds yield and the underlying price of every bond held by the fund. Every day the funds holdings are “marked to market” based on changes in interest rates and perceived risk (credit and call risk) of the fund’s holdings. In general (credit and call risk aside), a bond fund’s expectation is not good when interest rates are unusually low, and are very good when rates are unusually high.

Lastly, no asset class should be looked at in a vacuum. Every asset class should be viewed in the context of a component of a diversified portfolio. Portfolios should be constructed with both returns and risk considerations. That requires looking at the correlations between various asset classes and the goals and objectives of the portfolio. In that context, bonds can be a valuable addition to a portfolio in the correct circumstances.

What are the correct circumstances to hold an investment which provides a negative yield over the last 15 years?

[retiredguy123]

On May 1st 2007 BND closed at $74.77, on November 10th 2023 BND closed at $69.68
Those numbers are the net asset value for a one share in the fund. But, if you reinvest the interest earned, you will automatically purchase more shares, so you will have a lot more shares over time. There may also be capital gains distributions that will increase the number of shares. The total return is calculated by the increase in your fund balance over time, assuming that you reinvest the income.

[manaboutown]

A guy I know sold his parent's business back in the early 1980s and loaded up on municipal bonds as interest rates were at all time highs and eventually would likely revert to normal. He made a ton of money on the LTCGs as well as the tax-free interest. Why munis? He lived in a state having an income tax (still does). On the other hand last I read Schwab has unrealized losses of $1.94B on long term treasury bonds it bought while interest rates during recent years were maintained at all time lows.

[Caymus]

Yes bond fund returns are calculated based on all interest, and dividends if there are any, are reinvested and not withdrawn.

I think you may have been looking at a chart that does not adjust for interest payments.
Vanguards webpage indicates a cumulative 51.39 % return for the life of the fund.

Vanguard Mutual Fund Profile | Vanguard (https://investor.vanguard.com/investment-products/etfs/profile/bnd#performance-fees)

[spinner1001]

I have never understood bond funds. If I buy the bond and keep it to maturity, I get 100% the interest and all of my principal back at the back end (although rarely there could be a default). Bond funds don't do that.

The amount of capital in bond funds and bond ETFs is huge. A lot of money — including smart money — finds value in fixed income investing in funds and ETFs rather than investing in individual bond issues.

Most fixed income investors do not have the skill, time, or motivation to make good decisions to pick bond issues. Managers of bond funds and bond ETFs do. Moreover, most fixed income investors do not have the capital to invest in too many bond issues and, thus, are exposed to much higher default risk compared to investing in funds and ETFs holding hundreds or thousands of bonds. If a bond investor buys one bond and its defaults, they can loose a lot of their wealth. With bond funds, one bond default is insignificant.

Also, if you buy a bond with a lower coupon rate as we have had in the recent past and inflation grows to, say, two times your coupon rate, you suffer greatly from high inflation by holding your bond to maturity, years in the future. In technical terms, you are exposed greatly to ‘interest rate risk’ even when holding to maturity by owning a single bond with long bond duration. The bond principal you get years in the future will not be worth nearly as much in times of higher inflation, which a low coupon rate won’t compensate you adequately.

If lots of capital is in a particular kind of investment structure, it serves a positive purpose to a large group of investors. Overall, money is not dumb money.

[spinner1001]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

The future may not resemble the past.

[spinner1001]

It’s all scheme.

Bitcoin?

[Robbb]

I think you may have been looking at a chart that does not adjust for interest payments.
Vanguards webpage indicates a cumulative 51.39 % return for the life of the fund.

Vanguard Mutual Fund Profile | Vanguard (https://investor.vanguard.com/investment-products/etfs/profile/bnd#performance-fees)

Hmm they webpage indicates 2.53% over the life of the fund.

04/03/2007


BND (NAV)
-1.56% -4.58% -2.46% 0.49% -5.52% -0.02% 0.88% 2.53%

[Caymus]

Hmm they webpage indicates 2.53% over the life of the fund.

04/03/2007


BND (NAV)
-1.56% -4.58% -2.46% 0.49% -5.52% -0.02% 0.88% 2.53%

I wrote "Cumulative"

1-yr 3-yr 5-yr 10-yr
Since inception

04/03/2007

BND (Market price) 0.42% -15.62% -0.02% 9.08% 51.39%
BND (NAV) 0.49% -15.66% -0.09% 9.18% 51.43%
Benchmark1 0.53% -15.64% 0.15% 9.67% —

[Barbiet]

I see that some of you are Bogleheads. I am one as well, and I wish there was a Boglehead club, but I don't have the expertise that some of you do. Anyone up to the challenge?

[La lamy]

The commission for funds are generally 1 to 5%. Just that makes me cringe, let alone the low interest bonds have brought in these past years. I have just started back into buying my own CDs, being satisfied with the 5.75% I get for a fixed one year.

[retiredguy123]

The commission for funds are generally 1 to 5%. Just that makes me cringe, let alone the low interest bonds have brought in these past years. I have just started back into buying my own CDs, being satisfied with the 5.75% I get for a fixed one year.
All of the Vanguard mutual funds are "no load" funds, which means that there is no commisssion paid to anyone. The Vanguard Short Term Bond Index Fund is an excellent bond fund that has an expense ratio of 0.07 percent, and a current yield of 5.19 percent. The expense ratio is the cost to operate the fund and the published yield is calculated after applying the expense ratio. So, the cost to the investor is less than one-tenth of one percent of the amount invested, which is extremely low. The fund has no other fees.

[Travelhunter123]

Hindsight is always 20/20. With any asset class you can find a historical time period that looks unusually good or bad. The last 15 years has been horrendous for bonds. The housing market crash of 2007/8, driven primarily by subprime mortgages, resulted in interest rates close to zero, and the Federal Reserve irresponsibly choose to keep rates artificially low for many years beyond the crisis. That was followed by a rapid increase in rates the last couple of years driven by hyperinflation. A perfect storm for bonds. A bonds return is driven by its yield as well as price changes. When interest rates go up, a bonds price declines and vice versa. When rates are close to zero, a bonds yield leaves little cushion to absorb losses due to price changes. Furthermore, when rates are close to zero, interest rates have little room to decline but lots of room to increase.

The difference between a bond fund and owning a single bond and holding it until maturity are very different. When you buy and hold a bond (assuming it doesn’t default or get called) your return is locked in, you earn the interest for the life of the bond and get your principal back at maturity. A bond fund’s return is very different, the fund never matures. Instead the fund is managed to constantly have a duration (for simplicity, duration is similar to maturity) within a tight range as outlined in the funds prospectus. The fund’s return is measured by total return, which changes daily. The main components of total return are both the funds yield and the underlying price of every bond held by the fund. Every day the funds holdings are “marked to market” based on changes in interest rates and perceived risk (credit and call risk) of the fund’s holdings. In general (credit and call risk aside), a bond fund’s expectation is not good when interest rates are unusually low, and are very good when rates are unusually high.

Lastly, no asset class should be looked at in a vacuum. Every asset class should be viewed in the context of a component of a diversified portfolio. Portfolios should be constructed with both returns and risk considerations. That requires looking at the correlations between various asset classes and the goals and objectives of the portfolio. In that context, bonds can be a valuable addition to a portfolio in the correct circumstances.

Thank you

[Ski Bum]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

As a fellow bogglehead, I'd like to add one more piece of info. Many mutual funds (take the American Balanced Fund, for example) have bonds, mortgage backed securities, and treasuries inside of them. So no need to buy bonds for diversity.

[huge-pigeons]

Being a hoglehead and applying his principles are the only way to make money in the market: low cost index funds. But this still requires you have to do some thinking to get in the right index funds.
Some people think that bonds are a safe investment, they are not. I think I remember bonds going down an average of 35% during 2007/2008, a little bit better than the 45% downturn in equities. But the recovery for equities is/was drastically better than bonds.
I diversify my holdings over certain sectors or what I see people buying in the market place, never buying any bonds. If I see oil demand going up or global unrest, I’m buying some oil. I like tech, watching meta, Apple, and nvidia
bottoming out last year, I’m buying a tech index fund. Russell 2000 is not doing well, so now is the time to look at small caps. Get in when everybody has jumped ship.
When I was working and checking out the different fund categories to invest in, bonds always gave you the least amount of return, followed by balanced funds (mix of bonds and equities) which only gained on average 1/3 to 1/2 of what a pure equity fund would gain, or you can get much higher returns if you are able to sleep at night with higher risk equities.

[Boffin]

Not bond funds but…

I have been in these for the past 12 months or so:

iShares 0-3 Month Treasury Bond ETF (SGOV)

The Fund seeks to track the investment results of the ICE 0-3 Month US Treasury Securities Index, which is composed of US Treasury bonds with remaining maturities of less than or equal to three months. The Fund invests at least 90% of its assets in the component securities of the Underlying Index.

Janus Henderson AAA CLO ETF (JAAA)

The Fund seeks capital preservation and current income by seeking to deliver floating-rate exposure to high quality AAA-rated collateralized loan obligations (CLOs). The Fund pursues its investment objective by investing at least 90% of its net assets in CLOs of any maturity that are rated AAA.

[MidWestIA]

when stock is going down take a look at these kinda like a bond

jepi
jepq

[jabacon6669]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

You're exactly right. I don't understand why more people don't invest in high yield dividend stocks. The stocks might fluctuate a long but the dividend makes up for and potential loss. I own 6 stocks that pay anywhere from 5 to 10%, each quarter they get reinvested. I have my account with Charles Schaub. We can buy and sell when ever we want. Move money freely, back and forth to our personal banks checking account.

[Caymus]

The commission for funds are generally 1 to 5%. Just that makes me cringe, let alone the low interest bonds have brought in these past years. I have just started back into buying my own CDs, being satisfied with the 5.75% I get for a fixed one year.

Who charges that much? Banks?

[FredJacobs]

Yes, the share price of the fund may have gone down over 15 years, but that doesn't mean that you lost money. Everytime you reinvest the interest, you purchase more shares. The gain/loss on any fund is the surrender value of the fund less the total investment.

Bonds perform inversely to conventional wisdom. You buy a $100 bond that yields 4%. As interest rates go up. the selling price of your bond goes down. Let's say you want to sell your bond and current interest is 6%. No one will buy your bond for $100 when they can buy a higher yield bond at the same price. So, you have to lower the price of your bond so that it yields 6%. The selling price of your bond is now $66.66. The reverse is true when interest rates go down. Right now, interest rates are high due to inflation.

Bonds usually get "called" when interest rates have fallen well below the original yield. It's like refinancing your mortgage when interest rates go down.

People buy bonds for many reasons. The most popular reason is that a sector of the bond market issues bonds that are not taxed by the IRS or the state. These are bonds issued by any state, city, village, etc. and are very popular in high tax states such as New York, Illinois, California, etc. For example, a $100,000 bond, yielding 6%, issued by either New York City or State, would earn $6,000 that would not be taxed by New York City, New York State or the IRS.

Hope this helps.

[Altawood]

The immediate value of a bond or bond fund, moves inversely with interest rates.

[dougawhite]

Want to get rich in the stock market, simply buy what I sell and sell what I buy. ;-)

[jimjamuser]

Hindsight is always 20/20. With any asset class you can find a historical time period that looks unusually good or bad. The last 15 years has been horrendous for bonds. The housing market crash of 2007/8, driven primarily by subprime mortgages, resulted in interest rates close to zero, and the Federal Reserve irresponsibly choose to keep rates artificially low for many years beyond the crisis. That was followed by a rapid increase in rates the last couple of years driven by hyperinflation. A perfect storm for bonds. A bonds return is driven by its yield as well as price changes. When interest rates go up, a bonds price declines and vice versa. When rates are close to zero, a bonds yield leaves little cushion to absorb losses due to price changes. Furthermore, when rates are close to zero, interest rates have little room to decline but lots of room to increase.

The difference between a bond fund and owning a single bond and holding it until maturity are very different. When you buy and hold a bond (assuming it doesn’t default or get called) your return is locked in, you earn the interest for the life of the bond and get your principal back at maturity. A bond fund’s return is very different, the fund never matures. Instead the fund is managed to constantly have a duration (for simplicity, duration is similar to maturity) within a tight range as outlined in the funds prospectus. The fund’s return is measured by total return, which changes daily. The main components of total return are both the funds yield and the underlying price of every bond held by the fund. Every day the funds holdings are “marked to market” based on changes in interest rates and perceived risk (credit and call risk) of the fund’s holdings. In general (credit and call risk aside), a bond fund’s expectation is not good when interest rates are unusually low, and are very good when rates are unusually high.

Lastly, no asset class should be looked at in a vacuum. Every asset class should be viewed in the context of a component of a diversified portfolio. Portfolios should be constructed with both returns and risk considerations. That requires looking at the correlations between various asset classes and the goals and objectives of the portfolio. In that context, bonds can be a valuable addition to a portfolio in the correct circumstances.
Thanks for the quality explanation. In my simplistic logic, I would say that the Vanguard total bond fund would NOT EXIST if it was of NO use whatsoever. Instead of evaluating it over a 15-year period, maybe its best use is to simply PARK money in a temporary SAFE spot and WAIT until a person feels they have the market trend FIGURED OUT and then move the money to say a Total STOCK fund or individual stocks.
........I can't say for sure that would be the best or only use, but that is basically all that I can add to this conversation.

[ithos]

bitcoin?

Nvdia?

[HJBeck]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

I tend to look at it differently. If I need a cash stream to cover my expenses bonds are good if you don't need your principle immediately. Look at a Bond investment today and because of their prices one can get anywhere from 5.0% to 9.0% on your money for the entire term of the bond. When that bond matures you get back the PAR value of that bond, not what the market is pricing it at. Actually makes sense if you are interested in cash flow and don't need to sell immediately. All comes down to timing of your needs.

[collie1228]

Is that true? If I keep the bond to maturity, I don't care a bit what it's value is on a bond market. I get paid the principal. What am I missing?

[collie1228]

Keep in mind that the returned principal would effectively be worth less if you bought the bond at 1% and it matures when rates are 5%.

Is that true? If I keep the bond to maturity, I don't care a bit what it's value is on a bond market. I get paid the principal. What am I missing?

[spinner1001]

Is that true? If I keep the bond to maturity, I don't care a bit what it's value is on a bond market. I get paid the principal. What am I missing?

See section 10 in this paper (link below) for what you seem to be missing. The author is a prominent guy in the financial world with skin in the game (founder of AQR Capital Management) and his PhD academic advisor was Nobel prize laureate Gene Fama.

https://www.aqr.com/-/media/AQR/Documents/Insights/Journal-Article/My-Top-10-Peeves.pdf

Feel free to disagree with the paper’s section 10 but at least please tell us what points in that section you believe are wrong and why.

Here is a bio about the author if you doubt his credibility or knowledge. Feel free to tell us about yours.

Cliff Asness - Wikipedia (https://en.wikipedia.org/wiki/Cliff_Asness)

[DAVES]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

With ALL investing there is what I call the shoulda, coulda, mighta. Buffet like has be come and adverb. Funds compare their returns to S&P 500 an attempt to put a number to average stock market returns. Buffet has said we should simply buy an S&P index fund. For those who want to follow Buffet, you can buy Berkshire Hathaway.

Today, you can get roughly 5% in a money market fund and you can use it for checking
account.

A bond fund? What you are buying is NOT the same as buying bonds. First of all they hold bonds that may not be of the investment grade you would purchase. Secondly they use leveraging. The borrow against bonds they hold to buy more bonds. The risk is higher and so is the return. Holders of the fund are paying the manager of the fund, which reduces your net return.

PLAN? A very old expression. Man plans and g-d laughs

[DAVES]

Is that true? If I keep the bond to maturity, I don't care a bit what it's value is on a bond market. I get paid the principal. What am I missing?

Like everything else no shortage of opinions. Also, no shortage of people willing to sell you advice. A fund. You invest in a fund. You risk YOUR MONEY. A fund manager. Whatever the management fee is. It is a BUSINESS. They do not work for free. Your return is NOT guaranteed. I can be negative. The return for the manager and team is a percentage of the money they can convince people to allow them to manage.even if investors lose money.

As far as what am I missing, the investor pays TAX on dividends, at your top tax rate and there is the hidden tax of INFLATION. It can be looked up. How much in dollars does it take to buy what a dollar could buy fifteen years ago or five or one or??????

[retiredguy123]

With individual bonds and bond funds, you need to understand both investments. Yes, you can buy an individual bond, hold it until maturity, and get all of your principal back plus the promised interest. With a bond fund, the net asset value will fluctuate with the interest rate market, and, when you sell your shares, you may or may not get your principal back, but, in some cases, you may get back more than your principal, and you may earn more interest than the individual bond has paid. Both investments have advantages and disadvantages. Personally, I prefer to invest in bond funds.

[Pairadocs]

I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.

As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.

When I was still in high school, I "invested" $500 from my meager grocery store clerk salary, $250 in a very well know bond fund and $250 in a total stock market fund. Never lost $250 of my desperately needed college money so fast, but fortunately, while the stock fund also took some hard hits, it more than made up for the bond fund loss. Over my college and grad school years, it was clear that my decision to continue to increase my knowledge of investing, and particularly the stock market and it's historic returns, really paid off for me for a life time. I remember one of the first books I read related what people who committed suicide would have had if only they had not taken that drastic step to end their lives.... I think that was one of the things that impressed me most, that "if only" they had faith they would have become multimillionaires in less than 5 years after the recovery...