For many retired investors, a key objective of portfolio management is creating a stable stream of income while preserving investment principal. Bond laddering is a strategy that may address both aspects of this need.
What Is Laddering?
A bond ladder is a portfolio of bonds with maturity dates that are evenly staggered so that a constant proportion of the bonds can be redeemed at par value each year. Many retirees construct bond ladders with a specific end point that is based on the amount of time they want the bond ladder to generate income. Laddering for a fixed term can …Read More