The US bond market has been underwater for 74 months straight. Six years of drawdown. Longest stretch ever recorded.
This isn't normal. Bonds were supposed to be the boring, safe part of your portfolio. The thing that cushions you when stocks go haywire. Instead, they've been a slow bleed for over half a decade.
Why? Because rates went from zero to 5% faster than most people could adjust their expectations. The Fed had to kill inflation, and bonds paid the price. Duration risk turned out to be very real risk.
Here's the thing: most retail investors still think of bonds as "safe." They are not volatile like stocks, sure. But safe? That depends entirely on what interest rates do next. And if you bought long-duration bonds in 2020-2021, you've been learning that lesson the hard way.
Six years is a long time to wait for your "safe" asset to recover. It's a reminder that every asset class has risk. Bonds aren't stocks, but they're not cash either. And in a world where central banks can move rates 5% in 18 months, duration is a bet, not a guarantee.
If you're still holding those underwater bonds, you're either waiting for rates to fall or you've already eaten the loss. Either way, it's been a brutal education in what "low risk" actually means.
This isn't normal. Bonds were supposed to be the boring, safe part of your portfolio. The thing that cushions you when stocks go haywire. Instead, they've been a slow bleed for over half a decade.
Why? Because rates went from zero to 5% faster than most people could adjust their expectations. The Fed had to kill inflation, and bonds paid the price. Duration risk turned out to be very real risk.
Here's the thing: most retail investors still think of bonds as "safe." They are not volatile like stocks, sure. But safe? That depends entirely on what interest rates do next. And if you bought long-duration bonds in 2020-2021, you've been learning that lesson the hard way.
Six years is a long time to wait for your "safe" asset to recover. It's a reminder that every asset class has risk. Bonds aren't stocks, but they're not cash either. And in a world where central banks can move rates 5% in 18 months, duration is a bet, not a guarantee.
If you're still holding those underwater bonds, you're either waiting for rates to fall or you've already eaten the loss. Either way, it's been a brutal education in what "low risk" actually means.
