Risks of Bonds?

Date: August 8, 2017

Issuer Risk

Subject to issuer risk, a bond will return the bond investor his/her principal back at maturity.
What this means is if the issuer goes bankrupt, a bond investor will likely not get back his principal.

Price Risk

Bond Prices are affected by interest rate movements. Typically when interest rates rise, bond price falls.
Investors should be aware that the price of their bond may fall due to interest rate rises.

Reinvestment Risk

Although investors do receive coupons on a regular basis, they may not be able to reinvest the coupons at the same rate that they received the coupons at.