Bonds are often called “risk-free,” but that only holds true if held to maturity—something most investors don’t do. Instead, the majority gain exposure through mutual funds or ETFs, which are constantly rebalanced and marked to market. This exposes them to duration risk and price volatility, albeit lower than equities. Unlike stocks, bonds lack a growth engine—they don’t compound value through innovation or earnings. As a result, bond-heavy portfolios tend to drag on long-term returns and can be vulnerable in rising-rate environments. While equities are tied to more predictable drivers like consumer demand and GDP growth, bond prices are highly sensitive to unpredictable interest rate policy, making them less stable than commonly perceived.