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Can you lose money investing in bonds?

The short answer is, yes. There is always a risk of loss when you invest, even with debt investments like bonds. However, bonds are generally considered lower risk than equity investments like stocks, particularly if they are highly rated.

When you invest in investment grade debt, you are loaning money to a company, government, or municipality. A great example of investment grade debt is a U.S. Treasury bond. With U.S. Treasury bonds you are loaning money to the U.S. Treasury. The Treasury is then agreeing to pay you back, on a set schedule, with interest. With highly rated, investment grade debt there is a low risk of default on the loan, so therefore there is generally a lower risk of significant loss.

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