Oran Hall | Bonds are risky too

Bonds are popular with investors who are keen on the safety of their principal, expecting to receive all of their principal on the maturity date. The experience of some investors, including the elderly who rely on them as a source of retirement income, however, is proof that bonds are not absolutely safe. Like all other forms of investment, quality matters. Thus, there are good quality bonds and poor quality bonds, and quality can change during the life of a bond if there are material changes in the financial position of the issuer.