How To Build A Bond Ladder — And The Best Brokers To Help You Do It
A bond ladder is an investment strategy that involves purchasing multiple bonds that mature at different times.
The ladder analogy is an apt visual tool to describe how bond ladders work: Each rung of the ladder represents a bond, with the lowest step occupied by whichever bond is due to mature the soonest. When that happens, money is freed up to spend, invest elsewhere or reinvest in a new bond to extend the ladder upward.
The biggest advantage a bond ladder has over investing in a single bond is that it allows investors to manage shifting market conditions and changing interest rates while maintaining a steady flow of income.
How to build a bond ladder
There are five main steps involved in…