One risk taken on by fixed-income investors is that of interest rates. As interest rates rise, bond prices usually fall, which reduces your investment’s value.
Meanwhile, inflation is another downside of fixed-income investing. It decreases the value of bonds and other fixed-income assets. Inflation means that even though the initial dollar amount of your investment is safe, that dollar’s buying power decreases.
In the case of corporate bonds, investors might yield higher returns, but also assume greater risks. If companies don’t perform well in the future, that increases the risk level to bondholders. You can research companies’ credit risk via Standard & Poor’s or Moody’s, but that doesn’t guarantee that you will find a perfect investment.
View more information: https://marketrealist.com/p/how-to-invest-in-fixed-income/