Yes, you can lose money on bonds. Although bonds are often seen as low-risk investments, it’s still possible to lose money on them. One risk you face as a bond investor is that the issuer of the bond may not be able to repay some or all of its obligation. With government bonds, the risk of default is generally quite low; however, with corporate bonds, the risk is something to consider. Another risk is that bond prices are constantly fluctuating and prices can move against you. If you need to sell a bond before its maturity and its price has fallen, you can lose money. Finally, inflation is also worth considering. If you’re earning 2% from a bond and inflation is running at 2.5%, you’re losing money in real terms. The easiest way to manage risk when investing in bonds is to own a diversified portfolio of securities.