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what is a cd laddering strategy Informational
- A very safe investment option How does CD laddering help in managing the risk of having all your fixed-income investments maturing at the same time?
- A more balanced approach to reinvesting in different rate environments What are the potential drawbacks of a CD ladder if the returns do not keep pace with the returns of other similarly low-risk investment options?
- Flexibility to adjust the ladder as needed
- Patience and long-term planning How does CD laddering align with the principles of dollar-cost averaging?
- Weighing the potential benefits How does CD laddering compare to investing in annuities?
- High-yield bonds offer the potential for greater returns but with higher default risk What are the considerations for using a CD ladder if you are saving for a long-term goal but may need access to some funds before the goal date?
- You choose the CD terms and amounts
- The CD continues to earn the original, higher rate until maturity
- CDs offer FDIC insurance and a fixed rate
- Facilitating accurate financial projections What are the potential drawbacks of a CD ladder if it limits your ability to access funds quickly in case of an unexpected financial emergency?
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