The second is liquidity risk. Corporate bonds with poor liquidity make it impossible for investors to sell bonds at reasonable prices in a short time, thus suffering losses or losing new investment opportunities.
The third is credit risk, that is, the company that issues bonds cannot pay interest or repay the principal on time, thus bringing losses to investors.
The fourth is the risk of recovery, that is, when interest rates fall, high-interest corporate bonds with recovery clauses may be forcibly recovered.
The fifth is inflation risk. The real interest rate of corporate bonds should be coupon rate minus the inflation rate. The higher the inflation rate, the lower the real interest rate of corporate bonds.
1. Are corporate bonds risky?
(1) is risky.
The repayment source of bonds is the company's operating profit, but there is great uncertainty in the future operation of any company, so corporate bondholders bear the risk of losing interest or even principal.
(b) Higher rate of return
The principle of direct proportion to risk requires that corporate bonds with higher risks should provide bondholders with higher investment returns.
Second, what are the types of risks?
(1) Interest rate risk.
Interest rate is one of the important factors affecting bond prices. When interest rates rise and bond prices fall, there is risk. The longer the remaining maturity of bonds, the greater the interest rate risk.
(2) Liquidity risk.
Bonds with poor liquidity make it impossible for investors to sell bonds at reasonable prices in a short time, thus suffering reduced losses or losing new investment opportunities.
(3) Credit risk. Some companies can't pay the bond interest or repay the principal on time, which brings losses to bond investors.
(4) reinvestment risk.
Buying short-term bonds instead of long-term bonds will have the risk of reinvestment. For example, the interest rate of long-term bonds is 14%, and the interest rate of short-term bonds is 13%. To reduce interest rate risk, buy short-term bonds. However, if the interest rate falls to 65,438+00% when the short-term bonds recover cash at maturity, it is not easy to find investment opportunities higher than 65,438+00%. It is better to invest in current long-term bonds and still get a return of 14%. In the final analysis, reinvestment risk is still an interest rate risk problem.
(5) Recoverable risks.
Specific to bonds with callable clauses, because it often has the possibility of forced callbacks, and this possibility is often when the market interest rate drops and investors charge the actual increased interest according to the nominal interest rate of the bonds, a good cake often has the possibility of callbacks, and our investors' expected income will suffer losses, which is called callbacks risk.
(6) Inflation risk.
Inflation risk refers to the risk that the purchasing power of money decreases due to inflation. During the period of inflation, the investor's real interest rate should be coupon rate minus the inflation rate. If the bond interest rate is 10%, the inflation rate is 8%, and the real rate of return is only 2%, the purchasing power risk is the most common risk in bond investment.
Legal basis:
Article 153 of the Company Law
The term "corporate bonds" as mentioned in this Law refers to the securities issued by the company according to legal procedures and agreed to repay the principal and interest within a certain period of time.