David Blair, QuadCap Wealth Management and Bond Ladders (First Part)
David Blair and QuadCap Wealth Management explain the benefits of Bond Ladders (First Part)
Dallas (I-Newswire) June 13, 2013 -
Bond Ladders, a powerful tool for retirement. A bond ladder works by spreading investment dollars among bonds that will mature at various times between one and fifteen years from now. In a normal interest rate environment, shorter maturities will yield less than longer maturities. Think of the individual bonds as rungs on your ladder. As each individual bond matures, your principal is made available for reinvestment at current interest rates.
The value of a ladder is the ability to reinvest the principal from the maturing bond into a new bond with a higher yield. The new bond will then become a new rung of your ladder. Another advantage of using the ladder strategy is that you can customize your ladder to suit your individual investment objectives, such as meeting future funding needs or fulfilling specific income requirements. Investment selection will also take into account such things as your tax liabilities, quality considerations and anticipated future changes in your financial situation.
Ladders are typically built using a variety of the following types of fixed income securities: U.S. Treasury and government agency securities, tax-exempt municipal bonds, corporate bonds, zero-coupon bonds.
Why Use a Ladder?
It's a Strategy for All Interest Rate Environments. Since a bond ladder enables you to reinvest your assets periodically over time, your portfolio will be less affected by interest rate volatility. This concept is similar to dollar cost averaging in stocks. As bonds come due, you are able to reinvest your principal into bonds of intermediate or longer term maturities, where the yields are higher.
We started QuadCap Wealth Management, LLC to focus on a highly personalized comprehensive counseling program that is driven by dedicated personal service. Our firm provides in depth comprehensive financial counseling that covers all areas of your financial affairs, such as employee benefits planning, tax planning and preparation, asset allocation strategies, estate planning and wealth transfer strategies, as well as risk mitigation strategies.
Published On:June 13, 2013
Print Release:Print Release
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