Holding bonds is a lack of understanding of volatility.

Why?

Because, depending on the curve and tenor, you can/could get 75 to 87% of the rough hundred year average price return WITHOUT price volatility. Over the last four to five years, for the most part, you weren’t paid to take risk in bonds; outside of a few very small windows.

Does this mean bonds are completely worthless?

No. At the foundation, they are capital formation tools.

There are certain scenarios and use cases where they play a part in portfolio construction (to each his on and for specific reasons).

Additionally, when volatility strikes, bonds are no different than any other asset class. Dislocations from volatility creates both opportunity and pain. It all depends on which side you are on.

In summary, bonds provide insight into one’s understanding of volatility.

“Volatility is a feature, not a bug.” - #bitcoin

Learn volatility and probability… this is the way.

Long vol is a hedge against rising rates.

Short vol is an opportunity to capture collapsing premium across time.