THE ACA FOUNDATION
  • Home
  • Our Story
  • The What's Up Newsletter
  • What's Up Finance Podcast
  • Contact
  • ACA Dashboard!

Blog

The 5 Biggest Bond Risks

1/8/2018

0 Comments

 
Bonds are great conservative investments that offer lower, but more safe yields. But being more safe does not mean there is no risk. Here are five examples of bond risks:
Interest rates and bond prices carry an inverse relationship- As interest rates fall, the price of bonds generally rise and vice versa.
Reinvestment risk- Having to reinvest proceeds at a lower rate than the funds were previously earning.
Inflation risk- If inflation increases dramatically, investors will see their purchasing power erode and may actually achieve a negative rate of return.
Credit/Default risk- If the bonds (certificates of debt) are not repaid, then the investors lose their initial principle. Corporate bonds are not guaranteed by the full faith and credit of the US government. 
Liquidity risk- Risk that an investor might not be able to sell his corporate bonds quickly due to a thin market.
Picture
0 Comments



Leave a Reply.

    Author

    My name is Camden Alchanati and my goal is to teach you how to create a future of financial stability and growth! 

    View my profile on LinkedIn

    Archives

    June 2020
    May 2019
    March 2019
    December 2018
    November 2018
    October 2018
    September 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017

    RSS Feed

Picture
Phone: (323)-553-2411
[email protected]

Term of the Week

May 3, 2020
Earnings Estimate:

An analyst's estimate for a company's future quarterly or annual earnings per share.
Term of the Week

Subscribe to our weekly 'What's up Friday?' Newsletter

* indicates required

View previous campaigns.

All Proceeds Go to charity!
Picture



All information stated does not represent The ACA Foundation's opinions and we do not claim responsibility for most of the content. This website does not provide individual or customized legal, tax, accounting, or investment advise.
​All Rights Reserved

Photos from Go-tea 郭天, Anthony Quintano
  • Home
  • Our Story
  • The What's Up Newsletter
  • What's Up Finance Podcast
  • Contact
  • ACA Dashboard!