Sunday, June 04, 2006

Bond ladder

The latest bond yields taken from FSM website is posted below.

Many have talked about forming a bond ladder using sgs bonds. I think its a easily executable idea iwht FSM platform. I personally have not tried that before.

forming a 10 year bond ladder will yield 3.12%. this way, if it is a rising interest rate environment, you can invest the bond maturing in the last year at a higher interest rate. in a secular enviroment where interest rate is rising to 12%, your opportunity cost is reduced.

No comments: