Safety of Investment Grade Bonds

With a few alarmists calling for a massive increase in municipal bond defaults and many investors still stinging from the Lehman Bros. bond defaults, should investors be worrying about their bonds? High quality municipal and corporate bonds have long been considered “safe” asset classes. Volatility in the stock market is enough to keep many investors up at night and now many may be losing sleep over their bonds too. This paper takes an historical look at the risks and relative safety of high quality municipal and corporate bonds. We will show that although investors need to carefully analyze their bond investments, they can still rely on high rated investment grade bonds to deliver predictable income and relative stability in their portfolios. Download Now…