Introduction
Investing in the stock market can be an exciting and profitable endeavor, but it can also be quite volatile. Many investors are looking for ways to add stability to their portfolios, and one strategy that has gained popularity is bond laddering. Bond laddering is a strategy that involves purchasing a series of bonds with staggered maturity dates, which can help reduce interest rate risk and provide a steady stream of income.
How Does Bond Laddering Work?
The concept behind bond laddering is relatively simple. Instead of investing all of your money into one bond with a fixed maturity date, you divide your investment among a series of bonds with different maturity dates. For example, let’s say you have $10,000 to invest in bonds. Instead of investing the full amount into a single bond, you could divide it into ten equal parts and invest $1,000 in each bond.
