What are the Risks Associated with Bonds?
All bonds carry risks, including:
Interest rate risk: Bond prices fall when rates rise.
Credit risk: Issuers may miss or delay payments.
Inflation risk: Fixed income loses real value over time.
Liquidity risk: Some bonds are difficult to sell quickly.
Call risk: Issuers may redeem bonds early, affecting expected income.
Understanding these risks helps investors make informed, long-term decisions.
