NVDA +0.47% Trade NVIDIA on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
The bond market is going through some turmoil right now. Experts are calling it a "global bond market sell-off." Bond yields on major countries' government debt, such as the 10-year U.S. Treasury bond, have spiked by 1% or more within the past year. Investors seem to be selling bonds, demanding higher yields, and casting doubt upon the creditworthiness of the U.S. government.
You know what? I'm going to buy more bonds. That's right: even though lots of other investors right now are selling bonds, I'm going to keep buying them. In the same way that "buying the dip" on stocks when stock prices are low is often a good long-term investment, I'm going to "buy the dip" on bonds when bond yields are high.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Let's look at why now could be a good time to buy bonds, and which bond ETF I'm buying.
Why do people buy bonds in the first place? It's because they want to get paid consistent income with lower risks than the up-and-down roller coaster of the stock market. The yield paid by U.S. Treasury bonds is known as the "risk-free rate of return," because when you buy bonds from the U.S. government, you're guaranteed to get your money back in full, plus interest. The U.S. government has never defaulted on its debt, and almost definitely never will.
But when bond yields go up, the prices of existing bonds go down. That means rising interest rates (higher bond yields) are for investors who currently hold bonds paying yesterday's lower yields, but can be good for buyers of newly issued bonds at today's higher rates.
No one knows what's going to happen next with bond yields, U.S. national debt, or the overall economy. But I'm not panicking about the recent upward moves in bond yields. I don't believe that we're on the verge of recession or a U.S. national debt crisis. I believe in steady, consistent investing in a diversified portfolio of low-cost index funds, and bond ETFs are part of that mix.
The Vanguard Total Bond Market ETF (NASDAQ: BND) is, for my money, the best way to buy bonds for most American individual investors. I buy more of this bond ETF on every payday, every time I add more money to my investment accounts.
The bond market is complicated -- to me, even more than the stock market. This Vanguard bond fund makes it simpler. When you buy BND, you are buying shares of 11,421 bonds of all kinds within the U.S. bond market. These are generally low-risk bonds. Most of the fund's assets (about 69%) are in U.S. government bonds, and the rest are in corporate bonds with high credit ratings, also known as "investment grade."
As of October 8, BND is paying a 30-day SEC yield of 5.14%. If you buy bonds with this ETF right now, you're likely to earn a yield to maturity of 5.5%. And as the fund's bond holdings reach maturity, the fund will automatically buy more bonds at today's higher yields.
Keep in mind that just because a bond ETF is paying a yield of 5% (or more), that doesn't mean it will deliver a return of exactly 5%. Bonds are not risk-free. BND has delivered a negative total return of -1.85% in the past year:
BND (and other bond ETFs) lost value in the past year because interest rates went up in the past year. That made the prices of this bond ETF's existing holdings go down. Even though those bonds were paying a steady yield, the value of those lower-yielding bonds declined, based on today's higher bond yields.
But I believe that bond yields aren't going to keep going up forever. The 10-year Treasury yield recently reached its highest level since 2002. But this isn't far out of line with its historical averages. What if bond yields don't spike much higher from here? What if most of the bond losses are already priced in?
I believe there is upside potential for buying bonds right now -- like "buying the dip" on stocks after a price decline. 5% (or more) bond yields are worth locking in. Interest rates could go down in the next 10 years, which would make today's lower price of the Vanguard Total Bond Market ETF look like a good buy.
Before you buy stock in Vanguard Total Bond Market ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Total Bond Market ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $380,795!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,390,634!*
Now, it's worth noting Stock Advisor's total average return is 946% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 13, 2026.
Ben Gran has positions in Vanguard Total Bond Market ETF. The Motley Fool has positions in and recommends Vanguard Total Bond Market ETF. The Motley Fool has a disclosure policy.
Bond Market Sell-Off: 1 ETF I'm Loading Up on Right Now was originally published by The Motley Fool
