What To Do About Bonds

Estimated reading time: 4 minutes

Opportunity or Threat?

What’s happening in the Treasury market right now hasn’t happened in a very long time. 

• The 30-year Treasury yield is at 5.59%, the highest since 2002
• The 5-year Treasury yield is at 5.07% after topping 5% for the first time since 2007
• The 10-year Treasury yield is at 5.25%, the highest since 2007

At the risk of stating the obvious, 2002 and 2007 were not warm and fuzzy periods in market history. That fact alone is freaking people out, and we get it. 

But as investors, our job is to manage risk and look for opportunities. And it’s during these extreme periods that opportunities usually hide.

Income Is Hot

We’ve spent most of 2026 talking about hot inflation. Now we want to talk about hot income.

I’ve always thought of portfolio construction as balancing three goals: growth, preservation, and income. Depending on your particular situation, you’ll decide which order of priority these deserve. 

Generally speaking, younger investors (in this case, anyone 10 years or more away from retirement) typically do not prioritize income, so Treasury bonds are not often top of mind.

But at certain yields, Treasury bonds can also fulfill desires for preservation and growth. And we think that point is now.

Let me be clear that we are not calling a top in yields. In fact, we think U.S. yields may go even higher given the state of inflation, fiscal deficits, and rising yields in other parts of the world. So this isn’t about timing the trade into bonds (i.e. dollar cost average rather than buy all at once). This is about the possibility that we may not see this environment again for some time. 

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