Ladder Portfolio
Method of investing that staggers the maturities of a group of bonds. As a bond matures, the investor can reinvest the proceeds in either short- or long-term bonds depending on the interest rate and economic environment at that time. For example, if interest rates are rising, the matured bond's proceeds can be invested in longer term, higher yielding bonds. As interest rates decline, higher interest rates would have already been locked in through the previous purchase of higher yielding bonds. As bonds continue to mature in a falling interest rate environment, the proceeds can be invested in bonds of shorter maturities, thereby having liquidity for future investment in longer maturity bonds if interest rates increase.
Popular Insurance Terms
Case where an insurance company is placed by the state court under the control of the state insurance department. Claims are paid in the order filed until the insurance company's ability to ...
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Time at which life insurance death proceeds or endowments are paid, either at the death of an insured or at the end of the endowment period. ...
Frequency of illness, sickness, and diseases contracted. ...
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