International Bond Investing Risks

Investing in an international bond can be beneficial, but there are definitely several risks involved. Here are some risks associated with international bonds.

Normal Risk

When you invest in any bond, you have some normal risks. You have to worry about the company going bankrupt, and you have to deal with interest rate risk. If interest rates increase, the value of your bond goes down. If the company goes out of business, you may not get your investment back.

Currency Risk

Investing in an international bond is going to require you to convert your money to another currency. When you do this, the value of your currency may decrease against the other.

Global Political Risk

When you invest in another country, you have to worry about political risk. Anything could happen to the government running the country in which you are investing. Any of these factors could negatively affect your international bond investment.

Economic Risk

Another risk that you are going to have to deal with is economic risk. You have to be concerned with the stability of the economy in the country that you are investing in. If the economy performs poorly, it could negatively affect your investment.

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