Bonds are a type of fixed-income security where the investor lends money to a company or government for a specified period. In return, the investor receives regular interest payments and the principal amount back at the end of the loan term. While bonds are generally considered safe investments, there are some risks involved, and it is possible to lose money on bonds.
One way to lose money on bonds is if the issuer defaults on the loan. This means that the issuer fails to make the promised interest payments or repay the principal amount when it is due. Bond defaults can occur for a variety of reasons, including financial distress, bankruptcy, or a change in economic conditions.
