It has been said that stocks go up, and stocks go down. You may not think about this every day, but that's a great reason to own bonds. Here's why- the face value of bonds can fluctuate just as much as any stock, but the coupon value never changes. Once you buy a bond, you know exactly what you're getting in return. You know the interest rate you'll receive, you know what you're getting back if the bonds are redeemed. It can make a great hedging strategy to own both. However, in the case of a leveraged bond portfolio like the Pimco High Income fund (PHK), it makes absolutely no sense to keep holding when both the stock market and the fund have gone up at the same time. I sold a part of my holdings and am moving it to the allocation in my Vanguard Total Bond Market fund (BND). There's no need to take the risk. Additionally, there are better choices for income investors: Why not consider something like Prospect Capital Corp (PSEC), which has less leverage and a higher yield? That makes more sense to me. Plus, you get an equity component built into that price. The Pimco High Income fund closed at $8.52 today and earns about a 14% yield, and Prospect closed at $6.89, earning 14.4%. Since inflation and higher interest rates benefit Prospect, it doesn't seem prudent to keep juicing riskier bonds for yield.