Ultimately, the key to bond-fund investing is understanding what your funds can and can't do. A basic high-quality fund can act as a good balance to a stock portfolio, but by its very nature, it shouldn't be expected to outperform stocks over a long period of time. (High-quality bonds offer much more certain returns than stocks, so they don't have to proffer such high returns to attract investors.) And because interest rates almost never stand still, a bond fund shouldn't be expected to turn in positive returns every single year, either. In addition, inflation can quickly eat away at the fixed income payments offered by traditional bonds. That's where bonds with different structures, such as TIPS, or those with some credit sensitivity, such as junk bonds, can prove to be a welcome elixir.