2025 BND Returns--and future implications

Thank you for the kind words also. I read the 25 Myths book a long time ago and I believe this issue is one of the 25. The economics are clear there SHOULD be a risk premium for longer term bonds than shorter term bonds and/or cash equivalents. From time to time, the yield curve does invert though. However, should an investor with short-term liquidity needs--e.g., a retiree--own longer term assets? To me, the answer is that extra risk premium (return or yield) does not outweigh the fluctuations in the price of the longer term asset. Most bond funds of the popular custodians like Vanguard and Blackrock (IShares) show the YTMs of their funds. For BND, it's 4.3. For [AGG](https://www.ishares.com/us/products/239458/ishares-core-total-us-bond-market-etf), the weighted coupon is 3.66% and the YTM is 4.33%. If you are buying these funds, you have a pretty good clue of what your expected return is. In the same vein, [IEF, an intermediate treasuries ETF, ](https://www.ishares.com/us/products/239456/ishares-710-year-treasury-bond-etf), has a weighted coupon of 4.09% and a YTM of 4.06%, and as of today the 10Y treasury is 4.13%. As the saying goes, you can throw a hat on them. As of today, VMFXX (disclosure; I own shares in it) has a 7 day SEC yield of 3.69%, subject to change. That yield is comparable to the weighted coupon of BND and AGG. As to inflation, it should (theoretically; I'm not an economist) be the same for bonds OR cash, as they are denominated in the same dollar, so that shouldn't be a deciding point. Holding intermediate and long term bonds for a company like a bank or insurance company to match long term liabilities makes economic sense (and is often/usually a regulatory requirement). Holding intermediate or long term bonds for an INDIVIDUAL with short term liquidity needs does not make economic sense to me, because the added potential yield does not outweigh the potential volatility of the asset price. Thanks for adding to the discussion.