Since Mortgage Bonds are by far one of the safe havens found in investment, Does it mean that they are risk-free particularly with those government-backed MBS which carry the highest credit ratings?
No. There is no absolute safe haven found in the investment market, since every investment carries certain kind of risks including government-backed securities due to unpredictable and uncontrollable market and political variables. Creditability of a bond only represents its credit standing among those classified bonds with comparative values at a given time. It does not reveal the long-term stability of a bond in respect to drastic changing factors. Therefore, all bonds that carry credit ratings by major credit rating agencies are subject to regular and periodic credit reviews over their lifetime as to reflect their individual qualities in terms of market condition, and credit and operational adequacy caused by possible changing effects both internally and externally.
