1. There is a significant amount of fraud in the Wall Street bond market. The bond market is much larger than the stock market, and because the number of individual investors is fewer there is far less transparency. Danny Moses, who worked for Steve Eisman, was known to ask Wall Street salesmen, "How are you going to fuck me?" when engaging in trades with them that saved too perfect.
2. Moody's, Standard and Poor's, and Fitch IBCA offer credit ratings to help you understand risk. One of Wall Street's dirty little secrets is that the people who rate financial products are the people who can't get jobs with the big firms. In other words, almost by definition the ratings people are less qualified to assess the security of bonds than the people selling them. Which explains why the ratings agencies rated mortgage backed securities so highly just before they plunged the world into a financial crisis.
3. When you buy a bond you may be assuming call risk. Some bonds are written so that the issuer has the right to pay off the bond after a certain specified time. It might want to do this if interest rates fall, since in that case it would be cheaper to pay off the bond and then refinance at a lower interest rate.
4. Bond purchasers also have to be aware of event risk. Aflac, for example, gets 70%+ of its earnings from Japan, so it was hit hard by the earthquake / tsunami / meltdown. More mundane risks can come from regulatory changes, or even corporate mismanagement.
Does this mean you should never invest in corporate bonds? Absolutely not. But as with everything, due diligence is a must.
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