If you are very concerned over potential loss of principal,you should invest only in bonds with long maturities.

Question

Quizplus · Accepted Answer

Investing only in bonds with long maturities may actually increase the risk of loss of principal, as the longer the maturity, the more sensitive the bond's price is to changes in interest rates. If interest rates rise, the value of the bond may decrease, causing potential loss of principal. Instead, a more diversified portfolio with a mix of short- and long-term bonds, as well as other asset classes, may be a better approach to managing risk.

If You Are Very Concerned Over Potential Loss of Principal,you