Heard Asks if Bonds Get a Second Chance. The 10-Year’s Answer Was 5.292%
The cookie-cutter glide path put older savers in bonds while they lost money. Heard on the Street asks if the formula should now tilt the other way. Wednesday’s 10-year closed at a 24-year high.
By Sean Anees Saifi · Capital Wealth · Published Thursday, October 1, 2026 · Source: The Wall Street Journal, Thursday, October 1, 2026 edition, whose market figures are the Wednesday, September 30 close (Heard on the Street)
Key Points
A dollar invested in the S&P 500 would have more than doubled since the start of 2021 but lost value in the Bloomberg U.S. Aggregate Bond Index, Heard on the Street’s Spencer Jakab writes, citing FactSet total-return figures.
Vanguard’s Target Retirement 2025 Fund, aimed at people around retirement age, has just over half of its assets in bonds; the 2065 version, for people entering the workforce, has barely 8%. Older savers got hit harder.
The 10-year U.S. Treasury yielded barely half a percent in 2020. Low-coupon bonds have higher duration — more price sensitivity when yields rise, which is what then happened.
Shiller’s Excess CAPE Yield — stocks’ earnings yield versus inflation-adjusted bond yields — is 1.01 percentage points today versus 4.88 in March 2020. The column says that, in theory, the cookie-cutter approach that hurt older savers could help them now — or not, if inflation dents bonds more than stocks.
Bridgewater’s All Weather ETF is heavily overweight inflation-linked bonds. Elm Wealth’s Market Navigator ETF is underweight both U.S. stocks and bonds, with more weight in cash and emerging-market stocks.
2×+
S&P 500 total return since the start of 2021; the Agg lost value
~50%
bonds in Vanguard Target Retirement 2025; 2065 holds ~8%
0.5%
10-year yield in 2020 — the coupon that then got marked down
1.01 pp
Shiller Excess CAPE Yield now, vs 4.88 pp in March 2020
The bond case gets a rehearing. The long end still has to argue against its own supply.
In one line: Bonds punished the glide path that stuffed them into retirement accounts; a 24-year yield high is not, by itself, a reason to stuff them back in.
Set-it-and-forget-it only works if the thing you forgot to do is the math. Heard on the Street’s Spencer Jakab notes that a dollar in the S&P 500 more than doubled since the start of 2021, while the same dollar lost value in the Bloomberg U.S. Aggregate, the bond index a lot of target-date funds still treat as the grown-up sleeve. Vanguard’s Target Retirement 2025 Fund holds just over half in bonds. The 2065 fund, for people just starting work, holds barely 8%. The people closest to needing the money got the duration.
That outcome was sitting in the coupon. In 2020 the 10-year yielded barely half a percent. You were already losing money after inflation, Jakab writes, and you were going to lose more when yields went back to something that looked like history. Low-coupon bonds have more duration — more price sensitivity — which is exactly what the last five years delivered. None of that is hindsight dressed up as wisdom. It was the arithmetic on the screen.
The column’s maybe-now is not the desk’s so-buy-them
Things look different, the column says, with multi-decade yield highs and lofty stock valuations. Shiller’s Excess CAPE Yield — the gap between stocks’ earnings yield and inflation-adjusted bond yields — is 1.01 percentage points today versus 4.88 in March 2020. In theory the cookie-cutter that hurt older savers could help them. Or not: future inflation is a wild card, and it could dent bonds more than stocks. One hands-off attempt at that math is an asset-allocation fund; Jakab names Bridgewater’s All Weather ETF, heavy in inflation-linked bonds, and Elm Wealth’s cheaper Market Navigator, underweight both U.S. stocks and bonds, with more in cash and emerging-market stocks. Wednesday, the same paper’s markets pages had the 10-year at 5.292%, a 24-year high, still climbing.
Our read
Fixed Income (IN02): a 24-year yield high is not a second chance for the Aggregate. A bond still loses price if yields keep rising, and this week’s session was the exhibit — bills eased when a Fed official saw no urgency, the 10-year did not. Safe money stays in bills and floating-rate paper (SGOV, USFR). TIPS and I bonds can carry part of an inflation sleeve. Long nominal duration stays avoided.
The planning mistake in 2020 was buying the coupon without buying the date. The planning mistake in 2026 would be reversing the glide path because a column noticed the yield. Match the money to the year you need it. Cash for this year does not belong in a 30-year bond, even when Heard is asking whether bonds finally look interesting.
What It Means For Your Portfolio
Avoid — a 24-year yield high is not a reason to reload the Aggregate
The glide path that stuffed older savers into bonds while they lost money is being asked to reverse; Wednesday’s 10-year closed at 5.292% and was still climbing.
General planning principles, not advice for anyone in particular. Target-date funds raise the bond share as you age because bonds are supposed to be less risky. From 2021 they were not. A higher yield today still falls in price if yields keep climbing, so treating this as the cheap moment is a bet that this is the peak.
Match the money to the date it is needed. Bills and floating-rate paper for cash you need soon; inflation-linked bonds for a slice of inflation risk; long nominal duration stays off the list. A formula that only looks at your age is how the last loss happened.
