I'm of the old school bogleheads mentality. I've typically been ageInBonds since I started investing after the great recession. While I expect poor stock performance, I am pretty shook by the poor returns on bonds. I accepted years of poor performance with the expectation that they would cushion the blow during the next recession, and they have done nothing.

I don't know how long, or how bad this recession will be, but I will likely be much less willing to hold bonds going forward.

Sorry for your investment woes.

I think part of the problem is established dogma (and regulatory regime) that believes bonds offer diversification from stocks. However this seems to have broken down post 2008, as they have become increasingly correlated.

Imho it's healthy to expect that market regimes change, especially since we do not operate in free market, but a semi-intervined market (where the Fed sets the price of money which is an incredibly important input to the global economy).

I also think it's important to not think of diversification in terms of asset classes anymore, but in terms of alpha source.

I know this is much harder to do because, as far as I know, only by actively trading can you isolate and quantify alpha sources like this.

Bond funds are different than bonds. With bonds, you can hold them to maturity and not get whacked.

You can hold bond funds to the maturity date of the underlying bonds and get the same result (minus fees).

But in either case, you still get whacked with inflation, which would show up on this chart as a drop.

At an individual bonds maturity I get the full principal back. How do I do that principal back from a bond fund if the value has dropped due to the macro environment?

The value will have dropped, but the distributions/dividends you got in the meantime will have made up the difference. The fund and its underlying holdings must end up even in the end (minus fees).

Bonds have been the only thing backstopping my 401k from taking the bigger hit that equities have taken, the Vanguard 500 portion itself is down 21% or something and total I'm still down 16% or something like that YTD.

I'm guessing it's the "real returns with investment" that is painful here... bonds may not be losing (as) much but they're also not keeping pace with 10-15% annualized inflation either.

Due to the way energy prices (which are a massive component of everything else too) are factored out of CPI, even TIPS probably has negative real returns at this point compared to reality. Is there a non-CPI TIPS equivalent, lol?