Stocks and bonds are the most commonly owned securities among retail investors. Both stocks and bonds carry market risks and their value can be impacted by many factors, including the economy, the issuing company’s financial health, credit ratings, general market conditions, interest rates, news, corporate earnings, etc.
If your financial advisor recommended stocks and bonds, he or she is responsible for fully understanding the characteristics and risks of those investments and ensuring that they are consistent with your investment objectives and risk profile.
It is possible that when a financial advisor first recommends a stock or bond, it is suitable and appropriate. However, over time, due to an investor’s changing circumstances, changing market conditions or changes within the issuing company, the stock or bond may no longer be suitable. It is the financial advisor’s responsibility to recognize and understand these changes and advise you accordingly.
There is a common misconception among fixed income investors that bonds are safe and that they will never lose money. This is not true. Bonds carry a variety of highly complex risk factors that are impacted by interest rates, credit quality, and the bond’s particular features, including the bond’s maturity, callability and place in the debt structure of the issuing company.
If a portfolio is allocated correctly, investment losses can be mitigated or altogether eliminated. If you have experienced stock or bond loses, contact the Wolper Law Firm for a free consultation and case evaluation.