My net worth is only about 1% bonds. I agree locking in 5% long term seems attractive, but the risk of higher inflation and higher rates I don’t think is reflected in the 5%.
I know I used to be a rate/inflation dove. One reason for this is that I believed anti-inflation entities controlled enough political veto points. That premise was true for a long time, but no longer is the case now. I think the US Gov will be dumping bonds on the market, and despite the gigantic appetite for safe dollar bonds, federal deficits of 5-10% of GDP year in and year out will overwhelm it.
Telcos, mainly VZ and T, seem like a similar investment to bonds, but with inflation protection for two reasons. First, they can raise prices with inflation. Second, they have large fixed-rate debts that will be inflated away.
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