Should investors dump their bonds now?

Bond investors are scrambling to figure out whether interest rates have bottomed and where to deploy their cash.

European government bond and U.S. 10-year Treasury yields are trading at their highest levels in more than two months and the U.S. 30-year Treasury bond yield reached a high for the year on Tuesday. As yields rise when the price of a bond falls, there's a greater risk attached to holding on to the bond.

"These yield trends are hard to ignore," said Peter Boockvar, chief market analyst at The Lindsey Group, an economic advisory firm in Washington, D.C. "Investors should be focusing more on defense than offense."

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To Boockvar, that means investors should hold short-duration bonds and bond funds to avoid being hurt as yields rise and prices fall. He said he sees bargains in commodities, commodity-producing countries and their currencies relative to the rest of the market as well as U.S. Treasury Inflation-Protected Securities for their safety against rising consumer prices.

The bond selloff may create opportunities for patient investors.

"If you want to sell bonds, wait to sell them into strength," said Lawrence McDonald, managing director and head of the U.S. macro strategies group at Société Générale.

McDonald compared what the bond market is doing now to the 2013 "taper tantrum," which occurred after then-Federal Reserve Chairman Ben Bernanke first hinted to the markets that the central bank's massive liquidity program was coming to an end. (Fixed income funds in recent weeks have seen their biggest cash outflows since that period in 2013.)

Many bond investors overreacted then, McDonald said, and it became a buying opportunity as rates normalized. He is short-term bullish on 10-year U.S. Treasurys and the iShares 20+ Year Treasury Bond ETF and is tracking the bond market to determine where to invest next.

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The yield on 10-year Treasurys could rise higher than many on Wall Street expect, which could disrupt markets, Rebecca Patterson, Bessemer Trust's chief investment officer, said Tuesday on CNBC's "Squawk Box." "I think bonds are the scariest thing out there right now," she said.

While it is unlikely the Fed will raise rates in June, Patterson said she expects the central bank to act by December. "I think they desperately want to raise rates," she said.