The role bonds should play in your portfolio in 2025

In 2025, the role of bonds (^FVX, ^TNX, ^TYX) in an investment portfolio is dependent on an investor’s ultimate goals, with incentives ranging from one's income and diversification to capital preservation.
Schwab Center for Financial Research Fixed Income Strategist Cooper Howard joins Wealth host Brad Smith to elaborate on his outlook on bond market investing, highlighting that bond allocation in relation to broader economic indicators varies by individual objectives.
With the Federal Reserve now forecasted to cut just two times in 2025, "there's a lot of uncertainty and that could filter into the fixed income markets in terms of a lot of volatility," Howard explains. "There's a wide dispersion about what Fed officials believe."
Howard also advises caution with high-yield corporate bonds because of low spreads, while anticipating a "soft landing" scenario for the US economy.
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[Sanchyfab]

Bonds are traditionally seen as a way to balance risk in your portfolio, especially when the stock market is volatile. They provide steady income through interest payments and are generally less risky than stocks, but they’re not without their own challenges, especially in a changing economic environment

[tkc]

I am 63, sold my stock and bought 10 and 20 year bonds. no more stress. around 4.5% is ok with me....

[neilcook]

Age 63, just moved 70/30 to 50/50 to protect current highs and mitigate sequence of returns risks from an overinflated S&P Mag 7. If equities continue to increase I’ll get 50% of my portfolio riding it and if the much forecasted crash of a lifetime happens then I’ll shift bonds back to equities. Historically bonds almost always do better than cash and sometimes better than equities.

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[onionpeeler]

Central bank isn't buying any Treasuries, so rate cuts are useless as most of the buyers are going to continue being 3rd party investors which will keep Treasury rates high and pressure bond & stock ETFs...

[Coover]

I'm not super sophisticated but I don't get bonds ...a way to lose purchasing power a little less quickly?
Its plus 4, maybe 5%, right?
But M2 is growing at 10ish, and CPI is 3-4.
So you'd need 15% just to break even, right?
Bonds seem like a guarantee of gaining dollars but losing purchasing power.

[imdoc]

The best time to invest in bonds is never. Jk, it is in a low inflation environment with high interest rates.