Article: Laddering Bonds: Basics To Know
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Laddering Bonds: Basics To Know
Volatility of income can be as much a concern as volatility of growth, perhaps more so since income is an immediate need. Therefore, it makes sense that a strategy to stabilize income is a necessary component of portfolio management - and ?bond laddering? can help get you there.
Let's first understand that short-term interest rates are generally lower than long-term interest rates. In simple terms, the longer the maturity on a bond, the more risk you take and, therefore, the higher the interest reward for that risk.
We also know that, over time, interest rates will change. Sometimes they're going up, sometimes they're going down, but they're always doing something.
Finally, no investment objective lasts forever - and opening ?windows? of liquidi...
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