I understand about choosing the quality of bonds because some issuers may default but I don't understand some of the other risks associated with buying bonds.
I looked on Etrade under Corporate bonds and they listed some of these as the risks. But can anyone explain to me what exactly this means?
For example they say "When the overall bond market declines, the value of individual bonds may decline." I thought that you were gauranteed to be paid back the set principal value plus the interest agreed upon purchasing the bond.
They also listed this as a Call Risk : "If interest rates fall, an issuer may “call” higher yielding bonds, requiring you to reinvest the principal at the prevailing lower rates." Can they do this to any bond you purchase?
Submitted March 22, 2017 at 11:04PM by howdope http://ift.tt/2nERc6o
