For bond investors, sometimes it's best not to pay heed to advice

OVER the last three or four Januarys, the advice for investing in bonds has been remarkably consistent. It's gone something like this: Beware of them, because inflation is going to rise, interest rates are going to spike and bond holders are going to lose enormous amounts of money. When it came to losses, comparisons were made to what happened to equities in 2008.

There were exceptions to this analysis, of course. But for the most part, this view was repeated year after year, with charts, graphs and reams of historical data marshalled in its defence. On paper it made sense.

In portfolios, not so much. In fact, the exact opposite occurred: Inflation failed to materialise, interest rates went down, and bond holders made money on their investments.