Recently, I did something in my investment portfolio that I had never done before: I bought bonds.

I didn't make that decision based on a negative outlook for equity markets. I didn't do it because I think tariff uncertainty will lead to a U.S. recession (though it might). I didn't do it because I am approaching retirement or anticipating a large withdrawal need. I simply bought bonds because the yields have become too good to ignore.

This week, yields on 10-year U.S. Treasuries — bonds the full faith and credit of the federal government back — climbed above 4.6%. They are not far from the 2025 high of 4.8% in mid-January. Ten-year Treasury yields have not topped 5% since 2007 in the months preceding the Great Recession.

Investors buying a seven-year ladder of investment-grade corporate bonds can lock in yields around 5% annually. Those who land in higher-income tax brackets can net even better returns from municipal bonds. A seven-year ladder of high-quality Minnesota bonds pays around 4% tax-free. For Minnesota families subject to the highest income-tax rates (37% federal, 9.85% state), that's a 7.5% taxable-equivalent yield.

As financial professionals, we are constantly having conversations with clients about the tradeoffs between different asset classes. Everyone reading this column knows through long periods of time, stocks historically return more than bonds; roughly 10% annualized for the S&P 500 in the past 100 years.

Bonds, on the other hand, will look more or less attractive depending on the interest rate environment at the time of purchase. Even with the higher yields available today, it's a good bet stocks will outperform bonds through the next 10 years. But stocks come with high volatility; just review your stock fluctuations in April for a quick reminder. High-quality bonds might be boring, but 5%-7% with low volatility still has a place in most portfolios.

The outlook on inflation and Federal Reserve policy also affects the attractiveness of bonds. Lower inflation makes bonds a better value. The latest consumer price index showing 2.3% annual inflation (the lowest reading in more than four years) is another argument in bonds' favor.

Fed policy, meanwhile, has been neutral so far this year. The central bank has avoided any knee-jerk reactions to tariff uncertainty and kept the Fed funds rate unchanged since January. But consensus expectations suggest the Fed will resume rate cuts in either July or September. If the Fed lowers interest rates, bond yields will likely decrease as well, meaning investors can lock in better yields by purchasing bonds before those cuts happen.

Many people have been content to keep their conservative dollars in money market funds or high-yield savings accounts in recent years. These have been earning roughly 4% annualized with very little risk. The problem is that money market yields fluctuate with Fed policy. Individual bonds, meanwhile, will continue paying a fixed interest rate until their maturity dates. In a rising rate environment, money market funds work well. If rates, however, are destined to decrease, then bonds are the better investment.

It's important to note that buying and holding individual bonds until maturity (our preference) minimizes interest-rate risk. You don't get the same level of certainty from bond funds, which can be worth more or less than you paid for them, depending on whether rates rise or fall.

Some have suggested long-term bond yields could continue rising based upon the $37 trillion of U.S. federal debt. Credit rating agency Moody's recently downgraded U.S. government debt by one notch, which does drive yields higher. This is another reason to favor individual bonds rather than bond funds. If yields continue climbing, you can reinvest maturing bonds at higher yields.

The time is right to give bonds stronger consideration, especially if your taxable income is high, and you can reap the benefits of municipals. Better yields, higher-than-normal equity volatility and expected Fed cuts all make bonds as attractive as they have looked in decades.

Ben Marks is chief investment officer at Marks Group Wealth Management in Minnetonka. He can be reached at ben.marks@marksgroup.com. Brett Angel is a senior wealth adviser at the firm.