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Bond Ladder

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Bond Ladder

What Does Bond Ladder mean?

A strategy for managing fixed-income investments by which the investor builds a ladder by dividing his or her investment dollars evenly among bonds or CDs that mature at regular intervals simultaneously (for example, every six months, once a year, or every two years).

Investopedia explains Bond Ladder

Advantages of bond ladders are consistent returns, low risk, and ongoing liquidity because every interval the investor has securities expiring. The bond ladder also protects the investor's bond portfolio from call risk: Since maturities are staggered, there is little chance that all the bonds in one portfolio will be called at once.

Related Terms:
Bond
Corporate Bond
Interest Rate
Yield
Yield to Maturity



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A bond ladder is a portfolio of bonds of similar amounts and types, maturing at different dates.
Bond Ladder Tool - guides customers through the process of building a bond ladder, beginning with identifying preferred bond types and ratings, stating preferred time horizon (including dates and frequency of maturities), and finally selecting those bonds or brokered CDs that fit the customer's criteria.
Bond Wizard can also help investors build a bond ladder, which is an investment strategy of investing in an assortment of bonds and CDs that mature at regular intervals.
 
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