A bond ladder doesn't have to follow the ten-year example I used above. Five years seems about the minimum to take advantage of yield differences. The farther out it goes, the higher your yield will be and the greater the risk.
Bond ladders can be made of different materials. This simply means the diversification of investment types you place your money in. You can invest in municipal bonds, government bonds, treasuries or debentures.
A bond ladder is simply a portfolio of bonds with different maturities. For example in a portfolio of 10 bonds one bond could mature in 1 year, another in 2 years and so on. Each bond would symbolize a separate rung in the ladder.
Bond ladders
"Laddering" your bond portfolio simply means buying individual bonds with staggered maturities and holding them until they mature.
Bond Ladders
Investment strategy where an investor would diversify the bond portion of a portfolio by buying bonds with various maturities.
Bond Offering Detail ...
The Bond ladder of 2-5 year maturities works well as well but generally will not initially produce as much income but long term may provide a better total return.
Laddering Certificates of Deposit
Bond Laddering Charles Schwab Corp. website.
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TeenAnalyst Advice: Bond laddering works by purchasing bonds with different maturities. For example, you might purchase 3 year, 5 year, and 10 year bonds. By doing this, you are giving yourself greater liquidity because ...
 See also: Investment, Vesting, Investing, Interest, Risk
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