Quotes About Callability

Sensible investors avoid corporate debt, because credit risk and callability undermine the ability of fixed-income holdings to provide portfolio protection in times of financial or economic disruption.

From a superficial perspective, tax-exempt bonds appear to offer investors the opportunity to place fixed-income assets in taxable accounts (where their special tax characteristics lessen or eliminate tax consequences), freeing capacity in tax-deferred accounts for higher-tax-burdened assets. Regrettably, the problems of credit risk and callability lessen the appeal of tax-exempt bonds to investors.