We believe navigating dynamic market cycles requires a flexible mandate and the ability to combine rigorous macroeconomic insight with security-specific fundamental research. Learn more in our paper about the investment process behind the Loomis Sayles Core Plus Fixed Income strategy: https://lnkd.in/eiPCi6uE#CorePlus#FixedIncome
The Essential Guide to Navigating Bond Investment Risks: Ensure Your Portfolio's Integrity
In the realm of bond investing, understanding the myriad risks—from interest rate fluctuations to issuer creditworthiness—is not just beneficial; it's imperative for safeguarding your investments. This guide elucidates the key risks every investor should be aware of:
1. Interest Rate Risk - The fundamental inverse relationship between bond prices and interest rates.
2. Credit Risk - Assessing the likelihood of an issuer defaulting on their obligations.
3. Inflation Risk - How rising prices can diminish the real value of future bond payments.
4. Reinvestment Risk - The challenge of reinvesting proceeds at lower rates than the original bond.
5. Liquidity Risk - The potential difficulty in selling a bond without impacting its price.
6. Call Risk - The risk that a bond may be called away before maturity at unfavorable times.
7. Duration Risk - Longer-duration bonds are more susceptible to interest rate changes.
8. Market Risk - External economic factors that can affect bond investments globally.
9. Currency Risk - For foreign bonds, how exchange rate fluctuations can impact returns.
10. Political and Regulatory Risk - The impact of governmental changes on bond markets.
Armed with this knowledge, investors can make informed decisions, adeptly navigate the complexities of the bond market, and maintain the integrity of their portfolios. Let’s continue to build our financial acumen together.
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The fixed-income strategies investors relied on when rates were ultralow may not provide solid risk/reward potential in today’s bond market. Discover dynamic options for navigating today’s bond market challenges. https://amcen.co/4e8SkWx
