"Although buy-and-hold is a realistic option for investors who buy equities, it is an act of wanton imprudence for investors in debt securities. Ultimately, of course, a debt security reverts to cash, and thereafter earns nothing for its owner. Well before the maturity date, however, it's entire pattern of market behavior changes with the passage of time.

This means that active management of fixed income securities is an inescapable responsibility.

Lenders of money have two other factors to worry about. First, will the borrower meet all payments of interest and principal when due? Second, how much will those payments buy in terms of goods, services, and financial assets as the repayments come in?

From these four painfully obvious considerations: the impact of time, the credit worthiness of the borrower, and the relation of predetermined dollar payments to a changing price level, stems an extraordinarily complex collection of tools, techniques, risk and return calculations, and forecasting models for the active manager to worry about. In a world in which the variety of issuers and issues seems to proliferate continuously, this is no job for people who are seeking soft berths.

It is, indeed, an area where constant study is essential. What happens in any given market, in any given moment, or in any given economic environment is relevant for all the other markets, moments, and environments. Our learning requirements give us no surcease." Peter L. Bernstein President of Peter L. Bernstein.