No. of Recommendations: 2
Another aspect of laddering that's getting over looked is the "All-in vs. dribble-in" question.

In uncertain conditions (which is nearly always), it is both tough make decisions that have to prove to be good ones for 20-30 years, and it is scary to commmit huge chuncks of money to those decisions.

But intermittently making the best decision one can (in the given circumstances) and then committing a judicious amount of money to it spreads risk. This is exactly the sort of step-by-step pacing that building ladders imposes on investing decisions.

Think of a ladder as diachronic diversification, as opposed to synchronic diverisfication. Markets change over time, as do people and their ideas of what they require of their investments. By feeding money into markets in a methodical fashion and by having having money come out of markets in a methodical fashion (through profit targets, maturities, or whatever), one is continuously monitoring the pulse of things, but also not frantically or overwhelmingly engaged.

I like ladders, and I use them.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.