Investing term

What is Bond ladder?

A portfolio of bonds with staggered maturities — one matures every year (or every few years) so cash continuously becomes available.

A bond ladder is a set of bonds with staggered maturity dates — one coming due each year or few years — so cash regularly frees up. As each rung matures you can spend it or reinvest at current rates. The structure spreads out interest-rate risk and gives you steady access to cash without having to sell bonds early at a loss.

For example

Buy bonds maturing in 1, 2, 3, 4, and 5 years; each year one matures, and you reinvest it into a new 5-year rung — keeping the ladder rolling.

Bond ladder is taught hands-on in Stage 19 — Beyond Stocks.

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Related terms

ASMLDutch semiconductor-equipment company that makes the EUV lithography machines every advanced chip is manufactured on — a global monopoly with no US peer.CryptocurrencyDigital assets recorded on a blockchain — Bitcoin, Ethereum, etc. Highly volatile and not backed by cash flows or governments.Currency hedgingAn overlay used by some international ETFs to remove the effect of currency moves, so you get the foreign stock return in your home currency.DefaultWhen a borrower fails to make a scheduled payment on a debt — a missed coupon, or failure to return principal at maturity.
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