Beware, These Bonds Can Fail You

When buying bonds, Arnold and Esther Kossoff play it safe. "We take our risks in stocks," says Arnold Kossoff, a 70-year-old retired Boca Raton (Fla.) real estate broker who invests mainly in munis and Treasuries. But many investors have shown less restraint. With long-term rates at historic lows, they've gone out on limbs in search of high returns. "When yield is the sole focus, investors often end up taking on more risk than they intended," says Mark Wright, Morningstar's fixed-income analyst.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.