Morningstar Expert Warns Investors Against Timing Bond Market

Christine Benz, director of personal finance and retirement planning at Morningstar, advises investors to avoid tactical timing of the bond market. She argues that bonds should function as a stable component of a portfolio focused on the return of capital rather than growth, describing them as a sleep-at-night asset.

Benz notes that investors in 2026 have more protection than those during the 2022 bond rout, which saw significant losses driven by low starting yields and seven interest rate increases from the Federal Reserve System. With 10-year Treasury yields currently at approximately 4.8%, she suggests using individual Treasury bonds and Treasury Inflation-Protected Securities held to maturity for specific spending needs.

For investment horizons of three to 10 years, Benz recommends high-quality short- and intermediate-term bond funds. To support her position, she cites Morningstar's Mind the Gap research, which found that poor timing decisions reduced typical taxable bond fund returns from 3.0% to 2.1% for the 10-year period ending December 2025.