Bonds are facing a near perfect storm of obstacles this year. Excessive valuations, central banks raising rates, higher inflation, and uncertainty about the strength of the economy without covid subsidies. The return prospects for traditional bond index exposure are low this year. Total returns are likely to be flat to negative. Real returns, which account for inflation, will be worse. Investors will benefit from lowering duration exposure and holding higher levels of cash to deploy as interest rate rise. Floating rate and inflation protected bonds are also more attractive this year given their insulation from some of the biggest threats facing the fixed income markets. Investors should also add alternative or private credit strategies to fixed income portfolios where possible. Bonds still hold a key position in a prudent long-term portfolio allocation, but this year expect their role to be more about insurance than income.