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Avoid these 4 common bond buying mistakes

The article from AOL Finance titled "Avoid These 4 Common Bond Buying Mistakes" discusses key pitfalls investors should avoid when investing in bonds. It highlights the mistake of chasing yield, where investors might be tempted by high yields without considering the underlying risks such as credit risk or interest rate risk. Another common error is neglecting duration, which can lead to significant losses if interest rates rise, as bond prices move inversely to interest rates. The article also warns against overlooking credit quality, emphasizing the importance of understanding the issuer's ability to meet its financial obligations. Lastly, it advises against ignoring the bond's call features, where bonds might be called back by the issuer before maturity, potentially at an inopportune time for the investor. The piece concludes by stressing the need for a well-thought-out strategy that considers these factors to optimize bond investments.

Read the Full AOL Article at:
[ https://www.aol.com/finance/avoid-4-common-bond-buying-221713024.html ]