Step up to a bond ladder

Description

Abstract: Today’s low interest rate environment is a double-edged sword for many investors. While it’s nice to lock in an attractive rate on a mortgage, paltry returns on fixed-income investments make it difficult to generate income from savings. Longer-term bonds generally offer higher yields, but increase interest-rate risk. But investing in a bond ladder can diversify bond holdings and generate steady income over a specific period of time with reduced interest rate risk. This article explains how bond laddering works and the advantages it offers.