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
Indemnifies an insured whose property is stolen, damaged, or destroyed by a covered peril. The term property insurance encompasses numerous lines of available insurance. ...
Association formed to address the requirements of government risk pools. ...
Coverage in which an insurance company's portfolio is ceded to a re insurer who re insures a given percentage of a particular line of business. ...
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