{"id":2256,"date":"2020-04-27T13:41:39","date_gmt":"2020-04-27T13:41:39","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=2256"},"modified":"2026-01-21T04:15:56","modified_gmt":"2026-01-21T04:15:56","slug":"bond-investments-are-a-halo-of-safety-or-not","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/essentials\/bond-market\/bond-investments-are-a-halo-of-safety-or-not\/","title":{"rendered":"Bond Investments are a halo of safety or not?"},"content":{"rendered":"

Bonds are considered a low -risk assets, but bonds do come with a couple of risks. <\/span><\/em><\/p>\n

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T<\/strong>he term \u201cRisk in Bond Investment\u201c sounds like an oxymoron. Because once we hear the word \u201cBonds<\/a>\u201d, what comes to our mind is: bonds are debt investments, they give fixed returns and are stable.\u00a0<\/span><\/p>\n

True, bonds can be relatively safer than a few other asset classes. Nevertheless, bonds do come with a couple of risks. Let\u2019s get aware of them and learn a few simple strategies on how to mitigate them. If you are not sure of terminologies used in the Bond market you may refer our <\/span>Glossary<\/span><\/a>. Else, we are good to go.\u00a0<\/span><\/p>\n

Imagine this situation: It is Monday morning and you are in your office canteen. You had a nice breakfast and are now looking for your mobile to pay for the bill. But you have left it in the laptop bag. Thanks to Monday blues. Understandably, in the present era of digital payment, you do not prefer to carry cash either. Helplessly, you tell the canteen owner \u201c Hey, I will pay along with the lunch bill\u201d. The canteen owner raises his eyebrows. He is entitled to receive money from you, so he is worried. If the canteen owner can think so much for credit of Rs.50 (usual cost of breakfast), then bond investors becoming skeptical about the return on their investment is no surprise.<\/span><\/p>\n

In the bond market, risk of not getting interest payments\/principal amount back on your investment is termed as<\/span> \u201cDefault Risk\u201d\u00a0<\/b><\/p>\n

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