1, interest rate risk
Interest rate risk refers to the risk that the tightening of national monetary policy and the rise of interest rate lead to the rise of market interest rate, the suppression of bond market and the subsequent decline of bond price. Bond prices are inversely proportional to the trend of market interest rates. For American investors, investing in bonds or bond funds should pay attention to the future direction of monetary policy, so as to minimize the losses caused by interest rate risks.
2. Purchasing power risk
When the market interest rate can't keep up with the level of inflation, the purchasing power of money will decline, and investing in bond funds will make the income less and less valuable. Only when the nominal expected rate of return is greater than inflation will the purchasing power increase. At present, the expected rate of return of domestic debt investment is difficult to exceed the price level, and only equity investment is possible.
3. Investment risk
Investment risk refers to the mistake of the fund manager of the bond fund, which leads to the loss of the bondholders. In this regard, we should consider choosing large-scale and reliable fund companies to reduce risks.
4. Credit risk
Credit risk refers to the failure of the borrower who issues bonds to pay interest or repay the principal on time, which leads to the loss of bond investors. In order to avoid such risks, investors should choose to invest in bonds with high credit rating (such as interest rate bonds) and large-scale funds (the total number of investment bonds is large, which can spread risks, and the default of a single bond has little effect on the net value of funds).