The U.S. bond market is headed for its worst year of returns on record, but that could mean better days ahead for patient investors.

High inflation, coupled with the Federal Reserve's response to raise interest rates, led to the historic sell-off. And while the Fed suggests it'll likely continue raising rates through 2023, the worst may be over for the bond market. With much higher nominal yields versus a year ago, it'll take a much bigger move than anticipated to set bonds reeling downward again. That's not to say it couldn't happen, but the expected long-term return for bonds has climbed significantly since 2021.

With that in mind, investors may be wondering if they should shift their retirement portfolio asset allocation to take advantage of today's higher bond yields.

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Source Fool.com