Over the past decade and a half, the Barclays Aggregate Bond Index has been just one fourth as volatile as the U.S. equity market, as measured by standard deviation. That's not to say that bonds don't court some risks, however. Investors venturing into lower-quality bonds can suffer punishing losses during economic shocks, when such credits often tumble due to worries about whether issuers will be able to make good on their obligations. And in recent years, the main preoccupation for many bond investors has been the possibility of higher interest rates, which spell trouble for bond prices. As you survey your bond holdings today, here are some of the key questions to focus on, as well as details on how to find the answers.

Question 1: How interest-rate sensitive is the portfolio?

Rising interest rates can be welcome, particularly for today's yield-starved retirees. But when new, higher-yielding bonds hit the market, that hurts the prices of already existing bonds with lower yields attached to them. The longer the duration of a bond portfolio, the more vulnerable it will tend to be to interest rate increases. That's because not only will investors in the long-duration bond be stuck holding a lower-yielding asset when rates increase, but they will be forced to hold on to it for a longer period of time, increasing their opportunity cost. Investors can mitigate interest-rate risk somewhat by holding individual bonds until maturity, but it can be difficult for smaller investors to build well-diversified portfolios composed of individual bonds. Moreover, even if they buy and hold a bond, they'll still face opportunity cost if rates trend up. Investors can also reasonably match bonds' durations to their time horizons. Most intermediate-term bond funds, meanwhile, have durations in the neighborhood of 4.5 to 6 years.

Question 2: How vulnerable is the portfolio to an economic downturn and the stock market?

Another key risk factor for bonds is credit risk--the possibility that a bond issuer will be unable to pay its debts. To help make up for this risk, bond issuers with lower credit qualities typically must pay their bondholders higher yields than high-quality firms issuing bonds of the same duration. Default risk isn't the only reason that holders of lower-quality credits can run into trouble: In periods of economic hardship, such as the 2008 financial crisis, investors often sell out of low-quality bonds pre-emptively, thereby depressing their prices. That makes lower-quality bonds and bond funds less-than-ideal diversifiers for investors' equity holdings, in that their performance will often be directionally similar to stocks. Higher-quality bonds and bond funds are better diversifiers for stock-heavy portfolios.