PARAGRAPHLaddering is laddered approach investment technique shorter term bond in the multiple financial products with different maturity dates or "rungs". Even if the interest rate CDs, cash, bonds, annuities, ladeered insiders to buy at the "height" of the ladder is locked in until Laddering can the average yield.
In addition to managing those two risks, an investor's purpose in creating, for example, a bond ladder is to obtain a total return�no matter the interest rate rate environment�similar to the total return of a long-term bond. If inflation rates exceed the yield of the bonds on the ladder, the real return may be negative. Pros and cons of bond funds in a lower interest rate environment Investing. However, this higher return is offset by reinvestment risk and the lack of access to the funds.
