2015 has gotten off to an inauspicious start that has many market participants wondering if volatility will be the new buzzword this year. While stocks have struggled in the nascent days of trading, the bond market has continued to surge forward to new 52-week highs. The trend of rising bond prices (and falling interest rates) has carried forward into the New Year with both momentum and conviction. However, there is a case to be made that caution in long duration bonds may be warranted after this big run.

We are entering 2015 in a much different place in the bond market than this time last year. If you recall, treasuries and other interest rate sensitive asset classes were heavily under-favored at the start of 2014 due to the conviction that rates would head higher. There were hints that the Fed would be forced to end quantitative easing and raise the Fed funds rate on a faster time table than anyone anticipated.

Of course, prices didn’t ultimately follow the path that most investors expected and instead interest rates are much lower today than they have been at any time in the last two years. Treasuries, investment grade corporate bonds, preferred stocks, utilities, and REITs have been lifted by a counter-revolution back to safety .

The culprit for these plunging interest rates can be tied to a combination of factors that include fear of stock and commodity declines, hunger for U.S.-denominated debt, and overall trend momentum. If you look out across the developed world, an intermediate or long-term U.S. Treasury bond is still quite attractive relative to Europe or Japan. Many of these countries are seeing all-time historic low rates in their sovereign debt.

A look at a chart of the iShares 20+ Year Treasury Bond ETF (TLT ) shows just how meteoric the rise has been over the last 12 months given the economic backdrop.

While the trend continues to show favorable signs of strength, I would caution against moving heavily into bonds at this juncture given the potential for a consolidation or back track in yields. That is not to say that I am bearish on bonds or believe that interest rates are going to rise significantly over the next year. Rather, I am skeptical about the outlook for capital appreciation in long duration bonds over the next several months.

In my experience, money tends to chase performance  no matter what the overarching fundamentals or technical indicators may point to. That is why there are going to be many that are late to the bond party and wondering if they should be increasing their exposure to ride the trend or hedge other positions in their portfolio.

My advice is to re-evaluate the reasons you own fixed-income to begin with. If you are retired and have owned positions for years, then continue to hold them with the expectation that there may be some near-term underperformance after a stellar 2014. Ultimately, this asset class is still an excellent way to counteract equity exposure and balance out your portfolio to achieve an overall low volatility objective.

If you are a trader, you may want to consider the notion that you are a little late to the bond party. Patience and discipline may serve you better to consider purchasing this asset class on a pullback rather than plunging full steam ahead near the highs. Capitulating and buying here likely doesn’t offer a strong risk to reward opportunity unless your time frame is measured in hours or days.

For my clients, I am continuing to hold our existing fixed-income exposure  and watching several sectors for value opportunities. Actively managed mutual funds such as the Double Line Total Return Fund (DBLTX ) and PIMCO Income Fund (PONDX ) have been long-term holdings that have continued to perform admirably. Both funds have stellar managers that employ risk management strategies within the overall portfolio objective.

Areas that are starting to look interesting from a value standpoint include the spread widening in U.S. corporate high yield and emerging market bonds. The PIMCO 0-5 Year High Yield Bond ETF (HYS ) and iShares JP Morgan USD Emerging Market Bond ETF (EMB ) are two ways to potentially play this theme. Both have come in significantly from their highs and offer a compelling yield versus Treasury or investment grade corporates.

No matter how you ultimately play the next move in the bond market, take careful consideration of where we stand and how you are going to structure your portfolio to minimize drawdown or maximize income .