New York - If you want to reduce the risk of inflation on your investment portfolio, you should consider using a technique known as "laddering."
Laddering is a method whereby your income producing investments such as bonds or certificate of deposits maintain a rolling maturity date. For example, you would make several investments that mature on different dates (i.e., six months). This allows you to close out the initial investment and re-invest proceeds in the current interest rate environment.
If interest rates are higher, you can invest in longer-term instruments and you can invest in shorter-term investments when interest rates are lower. Laddering also gives you the benefit of having specified investment mature simultaneously with the need of cash for various things such as college expenses or a wedding.
If you're looking for help managing your bond investments, consider working with a FEE-ONLY financial adviser from the TheAdviser.com. Our network of FEE-ONLY advisers can offer unbiased advice, personalized guidance and help you make informed decisions about your bond investments. Ask us any question or obtain a free consultation at TheAdviser.com. Alternatively, visit 1800ADVISER.COM to browse biographies of individual FEE-ONLY advisers and choose one or more to connect with.
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