Having bonds is generally seen as a good idea in am efficient portfolio. While the price of the bondsay go down, it really only matters if you plan to sell them in the short or medium term. Another way of looking at it would be something that pays you 5% or so in perpetuity and the price doesn't really matter.
The 7% stock return has a lot of volatility to it so the bonds also effectively hedge your returns to the market ups and downs. Volatility really kills returns - if you have 100, it loses 20% one year and gain 20% the next you averaged a 0% return but you lost money from where you started ( you end with 96 in the scenario). Same for a 20% gain then 20% loss (96 of original again).
Wouldn't say to have your entire portfolio in bonds but having a bit definitely has some benefits by reducing the impact of volatility on your portfolio.
Some have said recently to go all bonds but I've never heard a big time investor say to do it and it hasn't played out over long term so so far I've been against it personally- not up for taking that large of risk for something to earn slightly more.