Bond Ladder


(Laddered Portfolio) A bond ladder is a portfolio of bonds that have staggered maturities. For example, rather than invest $100,000 in a 5 year bond, an investor might choose to invest in 4 blocks of $25,000 maturing in 2, 4, 6, and 8 years. This enables the investor to diversify in terms of default risk and reinvestment risk.
