Bonds are typically less volatile and carry less risk than stocks. Don’t get me wrong though, they still have inherent risks that must be considered:
Credit Risk: The inability to repay the loan.
Interest Rate Risk: If rates rise, then the bond loses value.
Liquidity Risk: The inability to convert the bond easily to cash.
Inflation Risk: The chance that the bond will not be worth more in the future.
Call Risk: The issuer has the ability to call back the bond if rates decrease.