Well, the last time I checked the yield to maturity (the best predictor of future bond returns) of the Barclays Aggregate € Bond Index was around 0.5%, which is quite a bit higher than Irish inflation (CPI) at around 0.2%.
I'm not suggesting that bonds are going to give anybody a great return at current yields. Nor am I suggesting that current low bond yields don't reduce the diversifying effect of holding bonds in an equity heavy portfolio.
But what other options do you have to dampen equity volatility? Invest in expensive hedge funds (aka absolute return funds)?
Or just invest your entire net worth in riskier assets and hope for the best?