Imagine carefully selecting a bond with a solid yield, only to see its credit rating suddenly plummet. This unexpected turn of events can significantly impact your investment returns and even threaten your capital.The downgrade risk refers to the
Risk and return
Issuer’s Creditworthiness: Assessing Risk, Evaluating Bonds, Making Informed Investment Decisions
Your success as a fixed-income investor hinges on one crucial factor: the issuer's creditworthiness. Think of it as the bedrock of your investment strategy. Understanding an issuer's ability to meet its financial commitments directly influences your
Inflation Risk: Impacts on Bonds and Strategies for Protecting Your Investments
Imagine this: You diligently save and invest in bonds, anticipating a comfortable retirement. However, the cost of everyday essentials – groceries, gas, rent – steadily increases over time. Your hard-earned savings lose their purchasing power, making
Liquidity Risk: Impacts, Factor Contributing to It, Strategies to Mitigate
Imagine needing to sell a significant portion of your bond portfolio quickly. Perhaps an unexpected opportunity arises, or you face unforeseen expenses. You need access to cash fast. However, you discover that selling your bonds isn't as
Currency Risk: How It Impacts Your Portfolio, Hedging with These Strategies
Imagine this: You invested in an international bond fund, anticipating attractive returns. However, the value of the foreign currency plummeted unexpectedly. Suddenly, those promising gains dwindled, and you faced potential losses. This scenario
Call Risk: What It Is, Key Factors Triggering Bond Calls, How it Impacts Your Portfolio
You've carefully selected bonds for your portfolio, drawn to their promise of a steady income and a degree of stability. You're seeking predictable returns to support your financial goals. But what if your carefully laid plans are disrupted? What if