Investing in bonds is risk-free investing in stocks is much riskier:
In addition, bonds generate higher rates of return than markets and are cheaper than inventories. Yet shares usually are made less costly than securities by the debt issuer's obligation to recover principal.
Another danger is that its issuer would mark a bond. In order to allow the borrower to buy the bonds from the bond holding firms and cancel the issue, Callable bonds have Call clauses.
This is typically done where interest rates have declined significantly since the date of issue. Appeals provisions permit the borrower, in order to lower interest rates, to retire existing, heavy-rate bonds and sell low-rate bonds.
