A $1,000 investment in the Bloomberg U.S. Aggregate Bond Index at the start of 2014 grew to about $1,240 by the end of 2023, a 24% cumulative return (roughly 2.2% annualized). That's nothing compared to the S&P 500's 224% gain, but bonds were never meant to compete. Their job is to dampen portfolio volatility and provide income.
During the COVID crash of Q1 2020, bonds barely moved while stocks plunged 34%. They provided real stability. But in 2022, a rare event occurred: bonds fell 13% alongside stocks, as the Fed raised interest rates at the fastest pace in decades. It was a reminder that bonds carry their own risk — interest rate risk — which materialized painfully.
For most portfolios, a 60/40 stock‑bond split remains a reasonable starting point. The bond portion may not make you rich, but it keeps you in the game during the darkest periods. The key is matching your bond duration to your time horizon and not expecting bonds to protect you in every single downturn.